WORKS   MANAGEMENT  LIBRARY 


MAXIMUM 
PRODUCTION 


IN 

MACHINE-SHOP 
AND    FOUNDRY 

BY 

C.  E.  KNOEPPEL 


I  J      >          I 

I          -I," 


NEW  YORK 

THE  ENGINEERING  MAGAZINE 

1911 


Copyright,  1911 
By  JOHN  K.  DUNLAP 


PREFACE 

The  material  on  which  the  present  book  is  based 
was  most  of  it  contained  in  three  series  of  articles 
published  originally  in  The  Engineering  Magazine 
at  various  times  from  October,  1908,  to  May,  1911. 
It  was  all  written  in  the  very  atmosphere  of  the 
busy  manufacturing  plant  and  under  the  influence 
1  of  daily  contact  with  the  problems  and  methods  dis- 
cussed. Everything  in  it  represents  some  phase  or 
period  of  the  author's  personal  experience.  As  here 
gathered  in  volume  form,  however,  the  material  is  all 
resurveyed,  rearranged,  largely  recast,  from  the  view- 
point of  a  larger  experience  and  a  maturer  study  of 
the  mechanical  industries  and  more  advanced  prin- 
ciples and  methods  of  management.  The  result  is 
a  logical,  well-proportioned  and  well-balanced  de- 
velopment of  the  subject  from  beginning  to  end,  by 
which  the  relations  of  all  its  elements  will  be  much 
more  clearly  understood.  The  discussion  will  be 
followed  again  with  new  and  increased  interest  and 
reward,  even  by  those  who  read  the  articles  as  they 
appeared  in  sequence  in  The  Engineering  Maga- 
zine. 

The  machine-shop  and  foundry  in  Mr.  KnoeppePs 
book  are  considered  as  twin  factors  in  production,  so 
closely  related  throughout  a  vast  range  of  metal 
manufacturing  that  their  problems  can  best  be 
studied  together.  Therefore  after  laying  down  the 
principles  of  organization  and  management  com- 
mon to  efficient  operation  and  maximum  success  in 
both  kinds  of  establishments,  the  author  follows  spe- 
cial applications  of  the  same  ideas  first  in  the  shop 


11  PREFACE 

and  then  in  the  foundry.  To  this  latter  he  gives  the 
larger  and  closer  attention,  because  it  has  heretofore 
been  less  thoroughly  studied  by  systematic  methods, 
and  it  yet  offers  immense  possibilities  of  profitable 
improvement  since  it  lies  at  the  foundation  of  so 
many  mechanical  industries. 

Mr.  Knoeppel  has  the  intimate  knowledge  of  shop 
and  foundry  conditions  and  workers  that  is  gained 
only  by  being  brought  up  "on  the  floor."  He  has 
the  grasp  of  principles  and  methods  that  character- 
izes the  unusually  successful  manager.  He  has  the 
wide  viewpoint  gained  by  association  (as  specialist 
in  betterment  work)  with  many  well-known  plants, 
having  been  formerly  associated  with  Harrington 
Emerson  and  later  a  member  of  the  organization  of 
Suffern  &  Son,  and  to  this  wealth  of  equipment  and 
experience  he  .brings  unusual  power  of  analysis  and 
clear  interpretation,  completed  by  close  study  and 
practice  under  one  of  the  greatest  of  efficiency  en- 
gineers. 

THE  EDITOR. 


CONTENTS 


PAGE 

CHAPTER    I.      THE    Two    GREAT    FORCES    IN    MANU- 
FACTURING 

Cost  Accounting  Should  Present  the  Right 
Kind  of  Information  in  the  Right  Way — In- 
efficient Use  of  Cost  Data — Cost  Data  Forceful 
.  in  Two  Ways — Analysis  and  Construction — Cost 
Data  of  What  has  been  Done  Used  to  Show 
What  can  be  Done — Accountancy  as  a  Spur  to 
Efficiency — Organization  for  Efficient  Super- 
vision— Outlines  of  an  Effective  Plan 1 

CHAPTER    II.      IMPORTANCE   OF    EFFICIENT    ORGANIZA- 
TION 

The  Purpose  of  Organized  Supervision — Keep- 
ing an   Efficient  Control   of   Changing   Business 
Conditions — Good    and   Bad    Schemes   of   Organ- 
ization— Charts    of    Duties    and    Responsibilities 
-Lists  of  Duties  and  Their  Assignment 17 

CHAPTER   III.     THE   ELEMENTS   OF   ACCOUNTING   AND 
MANAGEMENT 

Production  Elements  Analyzed — The  Division 
Common  to  all  Manufacturing  Plants — Classifi- 
cation of  Production — Depreciation  as  an  Ele- 
ment of  Cost — Rules  for  Determining  Deprecia- 
tion Rates — Forms  for  Depreciation  Records...  31 

CHAPTER  IV.    MAINTENANCE,  NEW  CONSTRUCTION  AND 
RECONSTRUCTION 

Commercial    Production,    Maintenance,    Recon- 
struction,   Special    Work,    and    Expense — Defini- 
tions    of     Assets — Distribution     of     Charges- 
Twenty    Practical    Cases   Discussed    as   Illustra- 
tions      54 

iii 


iv  CONTENTS 

PAGE 

CHAPTER  V.    SYSTEMATIC  PROCESSING,  ASSEMBLY,  AND 
ERECTION 

Dangers  of  Ignorance  of  Actual  Costs — In- 
fluences Affecting  the  Margin  of  Profit — The 
Factors  of  Production-Cost — Units  of  Produc- 
tion— Elements  of  Handling  Work — Material, 
Cost,  and  Operation  Cards — Principles  and 
Rules  of  Storeskeeping — Forms  for  Tools  and 
Jigs  and  Stock  in  Hand 76 

CHAPTER  VI.     EFFICIENCY  IN  THE  USE  OF  MATERIALS 
AND  TIME 

Common  Wastes  and  Their  Amount — The 
Elimination  of  Wastes — Organizing  the  Shop 
Departments — Systematic  Record  of  Orders — An 
Efficient  Routine  of  Production — Requisitions 
for  Material — Authority  for  Processing  and  As- 
sembly— Move  Orders — How  the  Forms  Are 
Used — Symbols  for  Work  in  Process — Time 
Records — Planning  and  Dispatching 95 

CHAPTER   VII.     BETTER   DELIVERIES— MORE   SATISFIED 
CUSTOMERS 

Commercial  Gain  from  Efficient  Production 
— Prompt  Delivery  Depends  on  Co-ordination 
between  Chief  Order  Clerk,  Works  Manager, 
Chief  Stores  Clerk,  Shipping  Clerk — A  System 
for  Securing  this  Co-ordination — Routine, 
Forms,  and  Records  Employed — The  Effect  on 
Efficiency  of  Production 128 

CHAPTER    VIII.      SCIENTIFIC    MANAGEMENT    IN    THE 
FOUNDRY 

A    Short    Foundry    Story    Bringing    Out    the 
Ordinary   Causes   of    Inefficiency,   with   a    Time     . 
Analysis  Summarizing  the  Results 143 

CHAPTER  IX.     FOUNDRY  ORGANIZATION  AND  MANAGE- 
MENT 

Basic  Principles — Fundamental  Questions  An- 
swered— The  Necessary  Expense — What  Can  Be 
Accomplished — Losses  Due  to  Faulty  Organiza- 
tion— General  Oranization  Charts — Charts  for 
Organization  of  Work  under  the  Foundry  Fore- 
man    180 


CONTENTS  V 

PAGE 

CHAPTER  X.     FOUNDRY  PRODUCTION  AND  ITS  DETAILS 

The  Vital  Purpose  of  Cost  Accounting  Is  to 
Increase  Production  and  Reduce  Costs — Making 
the  Working  Conditions  of  a  Foundry  an  Open 
Book — Commercial  Production — Working  Condi- 
tions— Classification  and  Symbolizing  of  Work 
— Detecting  Delays — Time  Analyses — Measuring 
Productivity — Averaging  Output — Units  of  Pro- 
duction    196 

CHAPTER  XL     EFFICIENT  DESPATCHING  IN  THE  FOUN- 
DRY. 

The  Magnitude  of  the  Loss  by  Delays — A 
Simple  Test  of  the  Value  of  Despatching — How 
to  Get  the  Most  Work  out  of  the  Foundry- 
Classification  of  Articles  Used — Classification  of 
Conditions  Affecting  Work — Personnel  Con- 
cerned— An  Efficient  Order  Arrangement — Mak- 
ing and  Carrying  out  Plans  by  Schedule — Work- 
ing Rules  Concisely  Stated 219 

CHAPTER    XII.     HANDLING     SHOP    DETAILS 

Qualities  of  the  Efficient  Manager — Foundry 
Work  Analyzed  into  Its  Primary  Steps — The 
Things  That  Must  Be  Done  Concisely  Stated  in 
Order — Planning  out  the  Work — Work  Order, 
Tally  Card  and  Report — The  System  Clearly  De- 
scribed— What  It  Accomplishes 245 

CHAPTER  XIII.    IMPORTANCE  OF  CORRECT  BURDEN  AP- 
PORTIONMENT 

Essential  To  Know  Where,  Why,  and  How 
Much  We  Have  Made  or  Lost — Three  Elements 
in  the  Cost  of  Good  Castings — Three  Typical 
Cases  of  Production  Examined — Charts  of  Bur- 
den Distribution  268 

CHAPTER  XIV.     ELEMENTS   OF   FOUNDRY   PRODUCTION 
COSTS 

Profits   not   Proportionate    to    Prices — Getting 
Results — Material  Accounts — Operating  Accounts 
-What    Accounts    Should    Be    Kept    and    What 
Goes  into  Each 294 


VI  CONTENTS 

PAGK 

CHAPTER  XV.    APPORTIONMENT  OF  FOUNDRY  COSTS  TO 
PRODUCTION 

The  Subdivision  of  Shop  and  Commercial 
Costs — Elements  Entering  into  Direct  Cost — 
Elements  Entering  into  Indirect  Cost — Elements 
Entering  into  Commercial  Cost — The  Items  Dis- 
cussed— Chart  of  Apportionment  to  Product 318 

CHAPTER    XVI.      COST    APPORTIONMENT    IN    VARIOUS 
CLASSES  OF  FOUNDRIES 

Classification     of     the     Foundry     Industry- 
Several    Ways    of   Treating   Production    Costs- 
Rules  for  Apportioning  Costs   in  Various  Cases 
— The  Methods  Codified  and  Explained 341 


MAXIMUM  PRODUCTION  IN  MA- 
CHINE SHOP  AND  FOUNDRY 

CHAPTER  I 

THE   TWO   GREAT   FOECES   IN   MANUFAC- 
TURING 

TT  is  extremely  doubtful  if  the  accountant 
-*-  of  a  hundred  years  ago  would  recognize 
present-day  accounting  practice.  He  cer- 
tainly would  be  in  no  position  to  appreciate 
immediately  the  progress  that  has  been  made 
since  his  day,  owing  to  the  fact  that  he  would 
be  lost  in  the  maze  of  bound  books,  loose- 
leaf  devices,  card  systems,  mechanical  aids, 
controlling  accounts,  short  cuts,  special  rul- 
ings, billing  machines,  and  a  hundred  and  one 
other  things  which  go  to  make  our  Twentieth 
Century  accounting  practice.  He  would  ad- 
mit, after  he  became  familiar  with  the  meth- 
ods used,  that  wonderful  progress  had  been 
made  since  his  time;  but  he  would  also  be 

1 


«   -    .     .   .     ., 

•    *•••»     • 

.  f         «       '.'    r     I 

<         <  •      •        «        w  i 


.  •  i  . 

'.       ,    •       • 
/'I'1'.''  •       ',  « 


2  MAXIMUM     PRODUCTION 

impressed  with  the  fact  that  many  account- 
ing schemes,  considered  excellent,  seriously 
approach    the    "worth,  next    to    nothing' 
point. 

There  are  a  number  of  reasons  for  this. 
In  many  cases,  the  accounting  is  a  mere 
jumble  of  figures,  which  have  little  or  no 
value  as  a  guide  to  the  executive.  In  others, 
vital  information  is  compiled  only  once  a 
year,  or  if  any  attempt  is  made  to  furnish 
monthly  statements,  they  are  furnished  so 
long  after  the  close  of  a  month  that  the  in- 
formation contained  in  them  represents  so 
much  waste  effort— they  are  furnished  too 
late  to  enable  the  executive  to  point  out  the 
reasons  for  certain  inefficiencies.  Then 
again,  accounting  schemes  may  furnish  in- 
formation without  regard  to  the  require- 
ments of  the  business  in  question;  or  they 
may  be  changed  materially  from  time  to 
time,  elaborated  upon,  "boiled  down,'  new 
features  added,  others  cut  out — each  new 
bookkeeper  introducing  a  few  "stunts'  of 
his  own,  until  he  gets  things  to  run  his  own 
way.  Between  all  this  and  accounting 
schemes  sold  in  "chunks,"  and  further  the 
willingness  of  each  auditor  or  accountant 
that  comes  along  to  point  out  where  the  ac- 


ANALYSIS    AND    CONSTRUCTION  3 

counting  fails  to  furnish  the  required  data 
-where  it  violates  the  rules  of  standard  ac- 
counting practice —the  scheme  in  a  short 
time  becomes  hopelessly  confused,  render- 
ing intelligent  comparison  absolutely  out  of 
the  question.  Is  it  any  wonder  that  a  manu- 
facturer, after  going  through  such  an  ex- 
perience, is  far  from  being  in  a  receptive  at- 
titude when  "accounting  system'  is  men- 
tioned to  him! 

To  present  the  right  kind  of  information 
in  the  wrong  manner  is  confusing  and  un- 
satisfactory. To  present  the  wrong  kind  of 
information  in  the  right  manner  is  mislead- 
ing and  dangerous.  It  would  be  far  better 
for  many  simply  to  keep  track  of  the  cash 
on  hand  and  what  is  due  and  owing,  than  to 
maintain  an  elaborate  accounting  arrange- 
ment which  does  not  result  in  an  accounting 
that  can  be  used  in  bettering  the  business. 
A  scratch  pad,  a  pencil,  and  a  good  guess 
would  be  just  as  efficient.  The  right  kind  of 
information,  rightly  presented,  is  therefore 
the  problem. 

As  a  declaration  of  principles,  let  us  decide 
at  the  outset  that  an  accounting  scheme  to 
be  efficient  must  first  of  all  consider  the 
needs  of  the  business  in  question;  that  it 


MAXIMUM     PRODUCTION 


must  be  comprehensive,  proceeding  on  the 
broad  assumption  that  information  should 
be  given  an  opportunity  of  working  for  the 
executive --not  a  burial  which  may  have  no 
resurrection;  that  it  must  be  designed  to  an- 
ticipate the  needs  of  the  executive  in  every 
possible  way;  that  it  must  be  planned  not 
only  to  make  possible  a  rapid  comparison 
and  analysis  of  the  various  elements,  but  to 
serve  as  a  statistical  bureau  as  well;  that  the 
accounting  must  be  simple  to  admit  of  its 
being  easily  understood  and  quickly  oper- 
ated, in  order  that  there  may  be  no  delay  in 
getting  the  pertinent  facts  to  the  executive 
promptly;  that  it  must  be  arranged  so  that 
unnecessary  work  and  entries  will  be  done 
away  with,  and  in  addition  should  be  de- 
signed to  furnish  information  during  the 
month— a  point  of  importance  to  every  man- 
ager. At  any  rate,  an  accounting  scheme 
which  measures  up  to  the  above  standard  is 
entitled  to  consideration,  for  one  of  the  pos- 
sibilities in  the  right  kind  of  accounting 
methods  is  better  and  more  complete  infor- 
mation in  quicker  time  and  at  less  cost  than 
is  usually  found. 

There  can  be  no  question,  however,  if  one 
stops  to  review  the  past,  that  there  has  been 


ANALYSIS    AND    CONSTRUCTION  5 

and  is  now,  on  the  part  of  a  great  many,  al- 
together too  much  dependence  placed  in  mere 
cost  records  and  figures;  for  while  they  are 
necessary  and  of  the  utmost  importance,  they 
must  not  be  considered  as  being  the  only 
means  to  a  desired  end.  A  great  many  are 
satisfied  when  their  cost  figures  inform  them 
regarding  the  disposition  of  their  money, 
and  in  addition  may  be  used  as  a  check  on 
their  selling  prices.  Others  go  a  step  further 
and  use  their  information  as  a  basis  for  com- 
parison between  operation  and  operation,  or 
of  completed  unit  with  completed  unit,  in 
order  to  detect  fluctuations  in  an  endeavor 
to  keep  costs  down.  Others  use  their  figures 
for  carefully  checking  up  the  departments, 
foremen,  machines,  operations,  men,  etc.,  in 
order  to  reach  some  conclusion,  even  if  not 
altogether  accurate,  as  to  the  efficiency  of 
their  plant.  Still  others  have  definite  esti- 
mates or  standards  against  which  the  actual 
performances  are  checked.  How  many  are 
there,  however,  who  use  their  facts  and  fig- 
ures for  all  the  purposes  mentioned?  If  all 
were  using  all  of  them,  they  would  be  bring- 
ing into  play  what  I  would  term  an  "ana- 
lytical force"— a  process  enabling  them  to 
apply  remedies  when  their  information  de- 


6  MAXIMUM     PRODUCTION 

veloped  the  fact  that  certain  places  needed 
prompt  attention. 

An  equally  important  force  can  be  em- 
ployed with  as  great  if  not  greater  results- 
one  which  can  be  fittingly  termed  a  "con- 
structive force,"  a  building  up  process - 
which  acting  in  harmony  with  the  force  just 
mentioned,  finds  ways  and  means  to  antici- 
pate as  far  as  is  possible  the  leaks  and  faulty 
conditions.  One  force  is  as  vital  and  neces- 
sary as  the  other,  although  it  is  true,  and 
unfortunately  so,  that  very  few  get  all  the 
good  possible  out  of  both  of  them.  Whether 
employed  separately  or  together,  they  are 
made  up  of  the  following  steps : — 

1.— Securing  data. 
2.--Eecording  the  data  secured. 
3.— Compiling    the    data    in    convenient 
shape  for  reference  and  study. 

4. --Reasoning  applied  to  the  compilations. 
5.— Conclusions  based  on  the  reasoning. 
6.— Action  in  some  definite  direction. 
7.— Results. 

The  principal  difference  is  that  the  ana- 
lytical force  is  concerned  with  figures  and 
statistics  showing  what  has  been  accom- 
plished, as  a  guide  to  future  action  and  re- 


ANALYSIS    AND    CONSTRUCTION  7 

suits,  while  the  constructive  force  is  con- 
cerned with  facts  and  information  as  to 
equipment,  conditions,  operations,  men,  etc., 
showing  ivhat  should  be  accomplished  in 
order  to  secure  results.  One  force  will  of 
course  do  a  great  deal  of  good  without  the 
other,  perhaps  because  of  the  fact  that  there 
remains,  in  modern  manufacturing  practice, 
a  great  deal  to  be  done,  but  it  should  be  seen 
that  the  two  forces  mentioned,  working  har- 
moniously along  widely  different  lines  with 
the  same  goal  in  view,  will  accomplish  more 
in  the  way  of  results  than  either  of  the 
forces  working  independently. 

Mention  was  just  made  of  the  fact  that  a 
great  deal  remains  to  be  done.  How  true  this 
is  no  one  knows  better  than  those  whose  pro- 
fession it  is  to  assist  in  getting  all  that  is 
possible  out  of  men,  equipment,  and  ma- 
terials, and  who  are  in  a  position  to  see, 
through  close  observation,  where  the  faults 
lie  and  what  will  eliminate  them.  There  is  a 
task  ahead  of  this  great  nation — a  task  of 
such  magnitude  as  to  warrant  wise  execu- 
tives giving  it  earnest  and  careful  considera- 
tion, as  well  as  to  attract  the  attention  of 
those  who  are  in  a  position  through  training 
and  natural  ability  to  assist  in  solving  its 


8  MAXIMUM     PRODUCTION 

many  problems — that  of  increasing  the  ef- 
ficiency of  all  human  endeavor. 

We  have  graft  and  investigations  of  one 
kind  or  another  until  it  would  seem  that 
there  remained  no  such  thing  as  civic  pride; 
we  hear  on  all  sides  constant  reference  to 
"high  cost  of  living7  with  innumerable  rea- 
sons therefor;  we  hear  that  railroads  must 
raise  their  rates  in  order  to  protect  them- 
selves, to  which  the  shipper  strenuously  ob- 
jects as  any  such  increase  affects  cost  of  pro- 
duction which  would  mean  still  higher 
prices;  we  see  sufficient  evidence  of  a  far 
from  diminishing  dissatisfaction  among  the 
laboring  classes  resulting  in  constant  strife 
between  capital  and  labor.  These  and  many 
other  conditions  which  could  be  mentioned 
furnish  sufficient  evidence  that  something 
is  decidedly  wrong— that  we  are  face  to  face 
with  conditions  which  cannot  exist  continu- 
ously without  disastrous  results. 

This  condition  of  affairs  has  been  most  ex- 
cellently described  by  H.  L.  Gantt:* 

With  increase  of  prices  comes  higher  cost  of  living ; 
with  higher  cost  of  living  comes  demand  for  higher 
wages;  with  higher  wages  comes  higher  cost  of  pro- 

*See  "Work,  Wages  and  Profits,"  by  H.  L.  Gantt,  The 
Engineering  Magazine,  New  York. 


ANALYSIS    AND    CONSTRUCTION 


duction.  Then  to  maintain  the  same  profit  under 
the  new  conditions,  we  must  again  increase  our  sell- 
ing prices  and  the  cycle  repeats  itself. 

This  vicious  cycle  is  illustrated  graphic- 
ally by  the  chart  below. 


Increase 
in  Prices 


Higher  Producing 
Costs 


Higher  Cost  of 
Living 


Demand  for 
Increased  Wages 


The  Engineering  Magazine 


FIG.     1.       THE     VICIOUS     CYCLE     OF     INCREASING     PRICES     AND 

COSTS. 

What  is  the  trouble?  To  me,  two  great 
faults  seem  to  be  responsible:  first,  extrava- 
gance and,  second,  impatience.  The  wide- 
spreading  movement  for  the  conservation  of 
our  natural  resources  is  sufficient  evidence 
that  as  a  people  we  are  extravagant,  and  no 
one,  after  due  consideration,  will  deny  the 


10  MAXIMUM     PRODUCTION 

fact  that  in  our  hurry  to  get  things  done— 
to  see  results — to  turn  time  and  material  into 
cash — impatience  is  largely  responsible,  both 
faults  being  the  result  of  our  present  system 
of  organization  and  management,  as  will  be 
evident  to  anyone  who  will  take  the  time  to 
read  carefully  Harrington  Emerson's  "The 
Twelve  Principles  of  Efficiency.' 

As  a  people  we  have  come  to  the  realiza- 
tion of  the  importance  of  conserving  our 
natural  resources,  and  as  a  result  we  now 
have  this  matter  as  one  of  our  lively  issues, 
forcing  the  attention  of  our  able  men.  What 
we  need,  however,  and  at  once,  is  a  move- 
ment for  the  conservation  of  our  resources 
other  than  water  power,  minerals,  timber, 
etc.,  which  would  mean  decided  benefits. 
This  would  involve: 


1.- -Increased  production. 
2.-  -Lower  production  costs. 
3. --Decrease  in  prices. 
4.— Lower  cost  of  living. 


as  an  offset 
to  the  condi- 
tion pictured 
in  the  chart. 


We  need  most  of  all  to  hear  more  about 
inefficiency  and  less  about  efficiency.  We 
like  the  latter  word  so  well  that  we  use  it 
without  much  thought  as  to  its  real  mean- 

*Published  by  The  Engineering  Magazine,  New  York. 


ANALYSIS   AND    CONSTRUCTION  .  11 

ing.  If  we  talk  about  the  inefficiencies  more, 
our  efforts  towards  eliminating  them  will  be 
increased,  and  efficiency,  as  a  natural  result, 
takes  care  of  itself.  Inefficiency  is  an  un- 
healthy state  of  affairs— a  disease  in  other 
words — just  as  susceptible  to  diagnosis  and 
treatment  as  any  unhealthy  condition.  If 
diagnosis  and  treatment  are  withheld,  how- 
ever, decay  and  death  is  the  result- -a  law 
which  is  no  different  in  its  relation  to  the  in- 
dustrial body  than  to  the  physical  body. 

Efficiency  in  the  best  acceptance  of  the 
term  means  more  than  simply  doing  things 
well-  -I  might  say,  thinking  or  guessing  that 
they  have  been  done  well;  it  is  the  positive 
relation  or  ratio  between  a  possible  accom- 
plishment— an  ideal,  a  standard — and  the 
actual  attainment.  We  have  had  altogether 
too  much  imagined  efficiency  and  not  enough 
of  the  cold,  mathematical,  relative  determi- 
nation. The  great  trouble  has  been  that 
standards  have  not  been  properly  set,  or  if 
set  no  consistent  effort  is  made  to  assist  those 
responsible  for  results  in  attaining  them. 
Consequently  we  have  accomplishments  that 
are  not  what  they  should  be,  which  if  re- 
duced to  a  relative  basis  would  show  that 
inefficiencies  are  still  "on  the  job.'  For 


12  MAXIMUM     PRODUCTION 

this  the  management  of  the  enterprise  is 
largely  to  blame.  Instead  of  beginning  at 
the  bottom  and  setting  standards  for  each 
and  every  part  of  the  work — whether  it  be 
operation  or  condition-- entering  into  mak- 
ing a  business  successful,  they  begin  at  the 
top  and  fix  in  their  own  minds  a  final  stand- 
ard as  regards  what  they  want  accomplished, 
after  which  they  promptly  proceed  to  un- 
load all  responsibility  onto  the  shoulders  of 
others — everyone  all  along  the  line,  down  to 
the  workers  themselves,  having  a  hazy  idea 
as  regards  what  is  really  expected  of  them; 
and  as  "anybody's  task  is  nobody's  work' 
it  stands  to  reason  that  the  final  attainment 
cannot  measure  up  to  the  expectation.  This 
however  does  not  seem  to  relieve  those  who 
have  failed  to  accomplish  what  was  wanted 
from  their  share  in  the  session  "behind 
closed  doors.' 

In  recent  years,  a  great  deal  of  attention 
has  been  devoted  to  "waste  products'  -a 
number  of  establishments  having  their  own 
corps  of  experts,  who  do  nothing  but  analyze 
and  study  the  wastes  previously  considered 
as  possessing  little  or  no  value,  with  the  re- 
sult that  the  markets  today  are  filled  with 
"by-products"  of  every  kind  and  descrip- 


ANALYSIS    AND    CONSTRUCTION  13 

tion  producing  a  revenue  which  pays  excel- 
lent dividends  on  the  cost  of  their  marketing. 

In  all  industrial  pursuits,  there  are  many 
wastes  which  can  be  made  to  yield  satisfac- 
tory returns.  Careful  investigation  in  the 
majority  of  institutions  will  soon  disclose  the 
fact  that  the  chief  wastes  are  due  to  time 
losses,  wasted  materials,  too  much  equip- 
ment, lack  of  intelligent  planning,  poor  and 
insufficient  facilities,  equipment  improperly 
maintained,  etc.  A  costly  bridge  is  erected, 
not  because  it  was  impossible  to  cross  before, 
but  because  crossing  is  facilitated  and  made 
easier  with  the  bridge  than  without  it,  and 
as  a  result  all  share  in  the  benefits.  If,  then, 
we  place  a  force  at  work  which  will  turn  the 
wastes  into  products,  we  erect  a  structure 
which  enables  the  consumer  as  well  as  the 
maker  of  the  products  to  share  in  the  bene- 
fits that  always  accrue  through  turning  out 
more  in  less  time. 

A  successful  organization  is  one  which 
considers  the  fact  that  the  "constructive 
force7  is  .a  building  force,  and  as  it  takes 
time  to  erect  any  structure,  results  must  not 
be  expected  in  a  minute;  that  it  should  be 
composed  of  men  who  can  give  their  time 
and  attention  to  the  careful  study  of  the 


14  MAXIMUM     PRODUCTION 

wastes,  or  be  assisted  by  men  who  are  expert 
in  analyzing  and  bringing  up  for  attention 
the  weaknesses  of  the  industrial  body;  that 
the  hearty  cooperation  of  the  ones  who  own 
and  operate  the  business  is  vital  and  neces- 
sary, in  carrying  to  a  successful  issue  the 
proposed  ways  to  greater  results.  It  should 
first  see  that  the  working  conditions  are 
what  they  should  be;  -that  the  equipment  is 
placed  in  the  best  possible  shape  for  maxi- 
mum production ;  that  the  men  are  furnished 
with  the  best  facilities  in  order  to  enable 
them  to  take  every  advantage  of  the  im- 
proved conditions  and  equipment;  that  the 
work,  in  its  various  details,  is  planned  ahead 
and  scheduled  so  that  delays  and  annoyances 
can  be  eliminated;  that  careful  observation 
is  made  as  to  time  and  materials  consumed 
in  order  that  suitable  standards  may  be  ar- 
rived at,  against  which  accomplishment  may 
be  measured;  that  advice  and  instructions 
are  given  in  order  to  assist  the  various  per- 
sons interested  in  attaining  the  standards 
set;  that  suitable  records  are  maintained  in 
order  that  the  management  may  know  ex- 
actly what  is  being  accomplished;  that  those 
who  measure  up  to  the  expectations  are  re- 
warded in  proportion  as  they  assist  in 


ANALYSIS    AND    CONSTRUCTION  15 

converting  "  waste  products'  into  "by- 
products. ' 

As  will  be  easily  seen,  the  above  is  not  the 
usual  procedure  in  the  majority  of  enter- 
prises. The  usual  course  is  to  engage  a  man- 
ager; to  allow  him  a  limited  time  in  which 
to  get  acquainted  with  the  conditions  and 
the  product,  and  after  that  to  tell  him  to  go 
ahead  and  get  results.  His  time  is  devoted 
to  securing  business;  pushing  the  work 
through  the  shops— many  times  regardless 
of  the  cost;  running  a  "diplomacy  bureau' 
for  the  benefit  of  the  customers;  worrying 
about  finances  and  getting  customers  to  pay 
their  bills;  listening  to  complaints  from  his 
men;  settling  disputes  and  quarrels,  and  a 
thousand  and  one  other  things  that  an  ex- 
ecutive is  called  upon  to  do  in  the  course  of 
seven  or  eight  hours  daily.  While  so  busily 
engaged,  in  spite  of  the  fact  that  he  may 
have  facts  and  figures  in  abundance  regard- 
ing what  has  been  and  is  being  done  (which 
he  uses  as  best  he  can  when  he  has  a  little 

* 

time),  it  is  easy  to  appreciate  how  it  is  pos- 
sible, in  the  absence  of  a  well-organized  at- 
tempt to  convert  wastes  into  cash,  for  time 
to  be  lost,  money  thrown  away,  materials 
scrapped,  etc.,  all  because  industrial  en- 


16  MAXIMUM     PKODUCTION 

deavor  seems  to  be  conducted  on  the  assump- 
tion that  the  more  detail  a  man  can  look 
after  in  the  course  of  a  day,  the  greater  he  is 
as  an  executive  and  the  more  he  should  be 
able  to  accomplish.  As  a  matter  of  fact 
there  is  a  limit  to  the  amount  of  detail  a  man 
can  handle,  but  practically  no  limit  to  the 
supervision  that  he  can  exercise. 

Supply  the  executive  with  proper  records 
and  a  staff  of  men  who  can  assist  him  in  lo- 
cating and  eliminating  wastes  and  inefficien- 
cies; make  him  a  supervising  agent,  not  a 
drudge;  furnish  him  two  good  strong  arms 
with  which  to  work — one  the  "analytical 
force' '  with  which  he  can  study  the  past  and 
present  as  a  guide  to  the  future— the  other 
the  "constructive  force'  with  which  he  can 
improve  and  build  new  structures,  and  the 
"By-Products  Department7  will  pay  divi- 
dends far  in  excess  of  the  cost  involved.  Un- 
less this  is  generally  conceded  to  be  the 
proper  scheme  of  management— and  not  only 
conceded  but  generally  Adopted — we  are 
going  to  have  with  us,  as  a  destructive  fac- 
tor, the  condition  of  affairs  so  clearly  pic- 
tured in  the  chart. 


CHAPTER  II 

IMPORTANCE    OF    EFFICIENT    ORGANIZA- 
TION 

TF  consideration  is  given  to  the  analogy 
A  between  the  business  machine  (the  man- 
ufacturing enterprise)  and  the  fighting  ma- 
chine (the  company  of  soldiers)  the  impor- 
tance of  "Organization7 '  is  at  once  apparent. 
A  company  of  soldiers  will  accomplish  re- 
sults in  the  surest  and  swiftest  way  simply 
because  they  are  well  organized  and  properly 
supervised.  From  the  captain  to  the  pri- 
vates, through  the  lieutenants,  the  sergeants, 
and  the  corporals,  the  orders  are  given  and 
executed  methodically  without  confusion,  de- 
lay, and  misinterpretation;  and  in  the  man- 
ufacturing enterprise,  the  orders  can  be 
given  and  executed  methodically  without 
confusion,  delay  and  misinterpretation --if, 
in  the  growth  of  the  business,  in  its  evolu- 
tion from  the  old  order  of  things  to  the  new, 
proper  consideration  has  been  given  to  the 
importance  of  a  well  trained  and  efficient 
organization.  I  do  not  maintain  that  it  is 

17 


18  MAXIMUM     PRODUCTION 

possible  for  the  manufacturing  enterprise  to 
attain  that  high  degree  of  efficiency  enjoyed 
by  the  army  company,  but  I  do  most  em- 
phatically maintain  that  it  would  be  possible 
for  more  jmanufacturers  to  be  more  success- 
ful than  they  are  if  they  would  inject  some 
I  sort  of  organization  and  supervision  into 
their  business,  \  instead  of  conducting  it  in 
the  hap-hazard,  disjointed,  hit  or  miss,  aim- 
at-the-ground-hope-to-hit-the-stars  way  of 
which  so  many  are  guilty.  To  this  class  the 
mere  mention  of  the  word  "organization' 
elicits  the  cry  "red  tape/  although  if  one 
of  them  would  once  consent  to  have  some  of 
this  kind  of  tape  wound  around  his  business, 
the  results  would  be  so  startling  as  to  win 
him  to  the  side  of  those  who  had  attained 
success  through  a  well  systematized  organiza- 
tion and  from  whom  he  could  learn  how  to 
conduct  his  own  business  properly  if  he 
would  but  once  get  away  from  his  habit  of 
jumping  over  dollars  in  an  endeavor  to  save 
pennies. 

If  space  permitted,  we  might  go  into  the 
details  regarding  the  evolution  of  business 
in  general,  from  the  primitive  stage  of  bar- 
ter to  its  present  immense  propositions.  In 
its  early  stages  business  was  most  simple. 


EFFICIENT    ORGANIZATION  19 

If  a  man  had  something  his  neighbor  needed 
and  he  needed  something  his  neighbor  had, 
a  trade  was  effected ;  or  if  a  man  had  several 
things  of  like  nature,  he  sold  them  to  others 
for  whatever  suited  his  requirements.  As 
the  demand  for  various  articles  increased, 
however,  it  was  found  necessary  to  specialize 
in  a  small  way,  but  in  a  way  which  enabled 
a  man  to  devote  his  entire  time  and  attention 
to  the  manufacture  of  one  thing.  During 
this  stage  of  business  development,  it  was  an 
easy  matter  for  the  proprietor  of  the  little 
establishment  to  give  his  attention  to  the 
various  details;  in  fact,  we  can  safely  say 
that  he  carried  his  office  "under  his  hat.' 
As  we  approach  the  next  stage,  we  find  that 
conditions,  becoming  a  trifle  more  complex, 
necessitated  a  radical  departure,  and  that 
instead  of  one  man  looking  after  every  de- 
tail, the  work  has  been  rearranged  so  that 
at  least  two  men  divide  the  responsibility. 
Tracing  still  further,  we  will  find  that  as  the 
volume  of  business  expanded,  the  amount  of 
detail  work  necessary  to  accomplish  results 
assumed  such  proportions  as  to  make  it  ut- 
terly impossible  for  a  few  men  to  manage  a 
business  properly.  At  this  stage  segrega- 
tion was  an  absolute  necessity,  and  today 


20  MAXIMUM     PRODUCTION 

manufacturing  enterprises,  while  still  a  unit, 
are  divided  into  two  distinct  brandies  -\ the 
commercial  and  engineering — these  branches 
being  again  divided  into  departments  and 
sub-departments.  | 

While  business  as  it  is  now  conducted  is 
not  as  simple  as  it  was  in  the  barter  days, 
it  must  not  be  inferred  that  this  segregation 
of  authority  is  synonymous  with  complexity, 
for  its  very  purpose  has  been  to  simplify  and 
this  is  what  it  has  accomplished.  It  is  only 
where  this  segregation  has  been  the  result 
of  lack  of  thought  and  proper  attention  that 
we  find  a  complex  and  unsatisfactory  condi- 
tion of  affairs.  In  fact,  there  is  all  about  us 
sufficient  evidence  that  many  commercial  en- 
terprises are  being  conducted  along  lines 
that,  as  far  as  evolutionary  development  is 
concerned,  are  several  stages  behind  the 
times. 

Let  us  suppose  a  case,  which  will  apply  in 
a  greater  or  less  degree  to  the  majority.  In 
the  earlier  development,  we  will  say  that  the 
founder  of  the  business  was  able,  on  account 
of  its  small  size,  to  make  what  sketches  he 
needed,  solicit  orders,  see  that  they  were 
filled,  perhaps  take  a  hand  at  the  making  if 
occasion  required,  see  to  the  shipments,  and 


EFFICIENT    ORGANIZATION  21 

attend  to  the  collections  and  the  keeping  of 
his  few  accounts.  He  finds  that  business 
grows,  and  eventually  places  a  man  in  charge 
of  certain  branches  while  he  looks  after 
others.  The  accounts  eventually  require 
more  attention  than  he  can  give  them  so  he 
engages  a  bookkeeper  in  order  that  he  may 
be  relieved  of  this  work.  He  finds  that  the 
quantity  of  materials  received  and  shipped 
amount  to  enough  to  warrant  a  receiving 
clerk  as  well  as  a  shipping  clerk,  and  to 
handle  this  material  from  its  inception  to 
shipment  he  conceives  the  idea  of  placing  a 
man  in  charge  as  stock  clerk.  He  then  adds 
a  purchasing  agent,  in  order  that  he  may  be 
relieved  of  the  detail  and  that  the  purchases 
may  be  made  most  economically;  a  man  is 
placed  in  charge  of  the  orders— foremen  are 
placed  in  charge  of  certain  men  in  the  shops 
—the  details  connected  with  making  plans, 
drawings,  estimates,  etc.,  are  taken  over  by 
a  practical  man— his  manager  is  given  a  per- 
son to  look  after  the  shops  or  engineering 
branch,  while  the  commercial  branch  with 
its  many  details  is  placed  in  the  hands  of  an- 
other. As  the  evolution  continues,  the  sell- 
ing function  is  assumed  by  one  man — cost 
details  are  looked  after  by  another — a  chief 


22  MAXIMUM     PRODUCTION 

inspector  is  added  in  order  that  all  work  may 
be  shipped  according  to  specifications— the 
engineer,  who  before  had  been  a  sort  of  jack 
of  all  trades,  is  placed  in  charge  of  certain 
work  while  an  electrician  is  engaged  to  look 
after  this  particular  work --and  so  this  seg- 
regation continues  with  the  development  of 
the  business. 

Perhaps  it  is  not  to  be  wondered  at  that 
the  founder,  in  looking  backward,  is  inclined 
to  pat  himself  on  the  back  when,  in  a  remi- 
niscent mood,  he  considers  what  he  terms 
"  remarkable  progress/  He  considers  that 
he  has  been  wonderfully  successful  in  build- 
ing up  a  business  which  at  the  beginning  was 
so  small  as  to  admit  of  his  supervising  every 
detail,  while  today  he  employs  a  dozen  men 
to  do  the  work  he  once  did.  There  is  no 
getting  away  from  the  fact  that  it  is  this 
V feeling  of  self-satisfaction  that  is  responsible 
for  a  large  number  of  faulty  organizations,; 
for  if  we  should  tell  this  manufacturer  that 
his  business  is  far  from  being  as  successful 
as  it  is  possible  for  it  to  be  he  would  be  very 
much  surprised  and  perhaps  angered— in 
fact,  he  would  vigorously  resent  any  such  ac- 
cusation; but  it  is  not  the  success  it  should 
be  for  the  very  reason  that  the  development 


EFFICIENT    ORGANIZATION  23 

has  been  allowed  to  take  care  of  itself.  New 
men  were  added,  new  offices  created,  onlv 

• 

when  absolutely  necessary,  each  newcomer 
being  given  a  general  idea  of  what  was  ex- 
pected of  him;  and  not  knowing,  not  think- 
ing, or  perhaps  not  having  the  time  to  give 
more  than  passing  attention  to  the  matter, 
the  proprietor  did  not  consider  the  fact  that 
his  business  was  a  unit,  with  each  worker  a 
part,  having  a  distinct  relation  with  every 
other  worker.  V.  Hence  as  the  efficiency  of  any 
organization  is  directly  in  proportion  to  the 
care  with  which  these  relations  are  con- 
sidered and  treated, (his  organization  natu- 
rally fails  to  attain  that  degree  of  efficiency 
obtainable,  and  for  this  condition  he  and  he 
only  is  responsible.  As  a  result,  we  find  in 
his  establishment  a  condition  of  affairs  that, 
shown  graphically  on  paper,  looks  like  Fig- 
ure 2.  We  have  here  an  organization  com- 
posed of  managers  and  heads  of  departments, 
but  we  also  have  a  confused  organization  in 
that  no  one  really  knows  where  his  authority 
begins  or  ends.  Consequently,  there  is  no 
sequence,  order,  or  harmony,  and  without 
these  it  is  impossible  to  obtain  maximum  re- 
sults. 

If,  on  the  other  hand,  the  proprietor  had 


MAXIMUM     PRODUCTION 


cost  Cierk 


Stockholders.     Directors 


~ "^\*  \  * 

•r' —^--A-V-£]Eecelvlng  Clerk 


Stock  Clerk 
Shipping  Clerk 
Foreman. 


'     \  \Kj  Foreman 

\  \V\ 

\      Vi 

V\    l\    Intilof   fr.or 


\  \  QJ  Chief  Inspector 
\\ 


I  Time  Keeper 


FIG.    2.      AN    ILLUSTRATION   OF  POOR  ORGANIZATION. 

given  due  consideration,  during  the  growth 
of  his  business,  to  the  importance  of  a  well 
regulated  organization— if  he  had  realized 
that  more  could  be  accomplished  through  an 
intelligent  supervision  than  through  a  super- 
vision where  one  authority  conflicts  with 


EFFICIENT    ORGANIZATION 


another— his  organization  could  then  be 
graphically  shown  by  Figure  3.  Compare 
these  two  charts,  and  the  difference  between 


-T~j  Sale*  Agent 

-f~|  Book  Keeper 

Business 

H-H 

-|    1  Purchasing  Agent 

Manager 

-Q  Chief  Order  Clerk 

-j    1  Head  Stenographer 

£ 

Q 

d 

•j  1  President          » 

1 

-j~)  Cost  Clerk 

c 

Q 

Cost 

1 

S 

s 

^^^              __.                                            Q 

-n- 

-fl  Time  Keepers 

e 

Stockholders                  Board  of        ft 

Vice                O 
1       1  President 

D  General 

Manager 

-Q  Olerki 

Directors         o 

•u 

-|       |  Secretary 

-Q  Chief  Engineer 

z 

~||  Chief  Electrician 

CO 

M 

a 

~LJ  Chief  Draftsman 

n'C 
Treasurer 
W 

^—                             a 

i 

-j~|  Receiving  Clerk 

w 

-|~j  Stock  Clerk 

Works 

^^^^1 

L_Q_ 

Mj&nA0«v 

-Q  Shipping  Clerk 

^•""••O*** 

"1    1  Foreman 

-j    1  Foreman 

H    1  Chief  Inspector 

FIG.    3.       DIAGRAM    SUGGESTING    AN    ORDERLY    AND    EFFICIENT 

ORGANIZATION. 


26  MAXIMUM     PRODUCTION 

an  enterprise  well  organized  and  properly 
supervised  and  an  enterprise  in  which  the 
opposite  is  the  case  will  be  apparent  with- 
out further  argument.  Enterprises  like  the 
one  shown  in  Figure  2  fail  to  appreciate  the 
importance  of  classifying  work  and  duties 
under  their  proper  authorities,  and  naturally 
the  result  cannot  help  but  be  confusion,  con- 
flicting orders,  arguments,  etc.;  while  the 
value  of  an  organization  like  the  one  shown 
in  Figure  3  lies  in  the  fact  that  work  and 
duties  have  been  properly  classified  and 
placed  under  authorities  most  competent  to 
handle  them,  the  effect  of  which  is  to  reduce 
to  a  minimum  the  friction  between  the  dif- 
ferent workers,  as  well  as  to  enable  them  to 
accomplish  a  maximum  amount  of  work  in 
the  shortest  time  possible. 

It  is  not  the  purpose  of  this  chapter  to  go 
into  details  as  to  work,  duties,  responsibili- 
ties, or  authorities.  Each  establishment  has 
its  own  peculiar  conditions— its  own  special 
needs— and  the  introduction  of  methods  or 
systems  must  be  made  only  after  careful 
thought  and  application.  The  fact  remains 
however  that  no  matter  how  complex  the  ex- 
isting conditions  in  any  enterprise  may  be, 
the  matter  of  properly  organizing  it  is  not  as 


EFFICIENT    ORGANIZATION  27 

difficult  as  might  be  imagined,  and  if  the 
work  is  started  and  carried  on  in  the  right 
way  it  can  be  accomplished  within  a  short 
time  with  gratifying  results. 

A  man  is  hired  and  receives  wages  or  a 
salary,  as  the  case  may  be,  for  a  distinct  pur- 
pose—to perform  certain  duties,  and  upon 
the  thoroughness  with  which  he  performs 
these  duties  depends  his  success;  but  he  de- 
pends in  turn  upon  the  clearness  with  which 
these  duties  are  defined— upon  full  knowl- 
edge as  to  whom  to  look  to  and  who  are  to 
look  to  him;  yet  this  part  of  the  contract 
never  receives  any  consideration  at  all  from 
many  manufacturers.  It  is  therefore  of 
primary  importance,  in  organizing  a  busi- 
ness, that  a  complete  list  of  work  and  duties 
be  compiled.  Provision  should  then  be  made 
for  placing  these  duties  in  charge  of  those 
most  competent  to  handle  them,  after  which 
it  should  be  decided  who  shall  direct  and 
supervise.  It  is  then  an  easy  matter  to 
classify  the  details  under  the  proper  authori- 
ties and  we  can  then  draw  up  an  organiza- 
tion chart  along  the  lines  shown  in  Figure  3. 

The  list  shown  on  page  28  was  designed  to 
provide  a  means  of  enabling  a  manufacturer 
to  compile  duties  and  then  designate  the  ones 


28 


MAXIMUM     PRODUCTION 


LIST    OF    DUTIES    AND    OFFICERS    TO    WHOM    THEY    ARE    ASSIGNED. 


WORK  AND  DUTIES. 


UNDER  THE 
DIRECTION  OF 


UNDER  THE 
SUPERVISION  OF 


The  figuring  of  depreciations Business  Manager  General  Manager 

Purchase  of  special  machinery..  General  Manager  Advisory  Com. 

Purchase|of  materials  and  supplies  Purchasing  Agent  Business  Manager 

Banking  arrangements General  Manager  Advisory  Com. 

The    checking    of    invoices    with 

materials  received Receiving  Clerk  Works  Manager 

Checking  invoices  for  payment .  .  Book  Keeper  Business  Manager 

Notes Book  Keeper  Business  Manager 

Fire  protection Works  Manager  General  Manager 

Appointment  of  those  under  com- 
mercial authority Business  Manager  General  Manager 

Appointment     of     those     under 

manufacturing  authority Works  Manager  General  Manager 

Compilation  of  sales  prices Sales  Agent  Business  Manager 

Passing  on  requisitions  for  ma- 
terials and  supplies: 

Engineering  branch Works  Manager  General  Manager 

Commercial  branch Business  Manager  General  Manager 

The  following  of  purchase  orders .  .  .  Purchasing  Agent  Business  Manager 

The  issuing  of  all  snipping  orders .  Chief  Order  Clerk  Business  Manager 

Billing  materials  shipped Book  Keeper  Business  Manager 

Experimental  work Works  Manager  General  Manager 

All  issuing  of  materials  on  written 

requisition Stock  Clerk  Works  Manager 

Maintenance    and    operation    of 

power  units Chief  Engineer  Works  Manager 

The  inspection  of  all  work Chief  Inspector  Works  Manager 

New  designs  and  changes Chief  Draftsman  Works  Manager 

Statements <  •  •  •  Book  Keeper  Business  Manager 

Payment  of  all  bills Business  Manager  General  Manager 

Collections  up  to  the  point  of  suit.  Book  Keeper  Business  Manager 

Collections  from  the  point  of  suit .  Business  Manager  General  Manager 

Ordering  of  new  parts  to  replace  Chief  Order  Clerk  Business  Manager 

Creation  of  systems General  Manager  Advisory  Com. 

Issuing  manufacturing  orders  .  .  .  Chief  Order  Clerk  Business  Manager 

All  filing Hd.  Stenographer  Business  Manager 

Handling  materials  for  shipment  .  Shipping  Clerk  Works  Manager 
The  maintenance  of  proper  stock 

margins Stock  Clerk  Works  Manager 

The  determining  of  proper  stock 

margins Works  Manager  General  Manager 

Execution     of     shipments     from 

written  orders Shipping  Clerk  Works  Manager 

Sanitary  and  plumbing  arrange- 
ments . ' Works  Manager  General  Manager 

Transportation Shipping  Clerk  Works  Manager 

Advertising  contracts Sales  Agent  Business  Manager 

Passing  on  credits Book  Keeper  Business  Manager 

Maintenance    and    operation    of 

electrical  equipment Chief  Electrician  Works  Manager 

Execution  of  work  on  time: 

f  Works'Manager 

In  charge  of  committee  com- 1  Chief  Order  Clerk  General  Manager 

prising |  Stock  Clerk 

I  Shipping  Clerk 

The  tracing  of  all  shipments Chief  Order  Clerk  Business  Manager 


EFFICIENT    ORGANIZATION  29 

to  look  after  and  supervise  them.  The  en- 
tries shown  have  been  selected  at  random  - 
the  list  has  been  purposely  made  incomplete 
on  account  of  lack  of  space,  and  is  simply 
suggestive  in  nature.  After  a  complete  list 
has  been  made,  the  work  of  classifying 
under  proper  headings  is  a  simple  matter 
but  one  of  great  importance,  as  the  follow- 
ing will  show:- 

BOOK  KEEPER,  under  the  supervision  of  BUSINESS 
MANAGER,  final  authority  GENERAL  MANAGER- 
shall  have  full  charge  of  all  bookkeeping,  the  giving 
of  all  notes,  the  issuing  of  statements,  the  billing  of 
all  materials  shipped,  the  handling  of  all  invoices  re- 
ceived— their  checking  and  passing  for  payment,  cash, 
the  disbursing  of  money  when  advised  to  do  so  by 
the  Business  Manager,  pay  rolls,  time  accounts,  pass- 
ing on  credits,  the  enforcing  of  all  collections  up  to 
the  point  where  legal  assistance  is  necessary,  the  hir- 
ing, paying,  and  full  charge  of  assistant  bookkeepers, 
bill  clerks  or  whomever  it  may  be  necessary  for  him 
to  engage  in  order  to  manage  his  department  prop- 
erly; the  arrangement,  classification,  and  handling 
of  his  accounts,  the  right  to  employ  whatever  meth- 
ods he  may  elect  without  changing  the  general  scheme 
of  the  accounting;  and  while  possessing  no  authority 
outside  of  his  own  department,  he  shall  have  the 
right  to  collect  such  data  as  are  or  will  be  necessary 
for  him  properly  to  compile  statements  as  to  the 
general  or  detailed  conditions  of  the  business. 

After  this  task  is  completed,  the  chart  of 
organization  can  be  quickly  made,  and  we 


30  MAXIMUM     PRODUCTION 

then  have  the  proper  foundation  for  an  ef- 
ficient organization.  By  following  the  sug- 
gestions outlined,  a  means  is  provided 
whereby  conflict  of  authority  would  be  al- 
most entirely  eliminated  with  friction 
greatly  lessened,  as  we  have  supplied  a  lubri- 
cant; and  as  we  have  succeeded  in  arrang- 
ing the  various  forces  in  the  most  logical 
way,  as  well  as  provided  for  their  care  in 
the  most  careful  manner,  it  is  well  within 
the  range  of  reason  to  /expect  a  maximum 
production  through  this  factor— "Effective 
Organization.'7/ 


CHAPTER  III 

THE    ELEMENTS     OF    ACCOUNTING    AND 

MANAGEMENT 

"O  ESULTS  of  action  vary  as  knowledge 
A^  increases  or  decreases,'  the  moral 
of  which  is — know  ivhat  is  going  on.  Any 
industrial  undertaking  is  operated  for  profit, 
by  men  who  do  not  start  out  with  the  definite 
intention  of  having  the  venture  eventually 
prove  a  failure.  They  expect  to  be  success- 
ful and  to  make  money  for  themselves  and 
for  those  who  may  be  associated  with 
them  in  the  business.  Theoretically,  then, 
there  should  be  no  such  thing  as  failures; 
but  the  mere  fact  that  each  year  adds  its 
number  of  industrial  wrecks  to  the  large 
number  that  have  preceded  them,  simply  em- 
phasizes the  fact  that  action  has  been  the  re- 
sult of  a  lack  of,  or  the  wrong  kind  of,  knowl- 
edge. 

The  simple  elements  of  any  business,  if  an- 
alyzed and  studied,  will  show  how  necessary 
it  is,  if  success  and  profit  is  to  be  attained, 
to  have  the  right  kind  of  knowledge,  fur- 

31 


32  MAXIMUM     PRODUCTION 

nislied  in  the  right  manner,  at  the  right 
time. 

Elements  must  always  be  recognized  be- 
fore knowledge  can  be  complete.  Mathe- 
matics would  not  be  mastered  in  a  thousand 
years  if  calculus  was  the  starting  point,  yet 
it  is  possible  to  go  into  plant  after  plant  and 
find  a  most  hazy  idea  as  regards  what  con- 
stitutes the  elements  of  the  business;  and 
where  an  element  is  recognized,  a  great  di- 
versity of  opinion  as  to  its  correct  definition 
is  likely  to  be  met  with.  The  purpose  of  this 
chapter  is  therefore  to  pick  out,  to  define, 
and  to  attempt  as  far  as  possible  to  reduce  to 
some  sort  of  standard  practice,  the  principal 
elements  entering  into  the  successful  opera- 
tion and  management  of  a  business,  in  order 
that  the  many  possibilities  in  the  two  forces 
discussed  in  the  opening  chapter — the  "  ana- 
lytical '  and  the  "  constructive " — may  be 
used  to  advantage  by  the  executive. 

The  purpose  of  any  business  is  to  make  a 
salable  commodity,  and  the  elements  which 
go  to  make  its  output  or  production  are:- 

1.  Articles  made  for  sale  to  the  trade  or 
to  the  company  of  which  it  is  a  part,  or  to 
both,  which  we  will  term  "Commercial  Pro- 
duction. " 


ACCOUNTING   AND    MANAGEMENT  33 

2.  Articles  made  for  the  use  of  the  plant 
itself,  which  we  will  term  "Shop-Use  Pro- 
duction. ' 

If  we  attempt  to  analyze  these  elements, 
we  shall  find  that  the  first  is  one  that  is  easily 
understood,  as  it  includes  only  such  items  as 
will  produce  a  direct  revenue  on  which  a 
profit  or  loss  is  made.  The  second  is  made  up 
of  several  other  elements  which  can  be 
picked  out  and  defined,  if  consideration  is 
given  to  the  following: 

While  the  definite  aim  of  the  management 
is  to  make  and  to  sell  as  much  as  possible, 
every  executive  is  confronted  with  the  ne- 
cessity of  periodically  replacing  or  renewing 
or  repairing  certain  parts  of  his  plant  and 
its  equipment,  which  leads  us  to  the  state- 
ment; in  order  to  produce  to  advantage,  we 
must  maintain  that  which  makes  our  pro- 
duction possible.  We  have  still  another  con- 
sideration. The  ambition  of  every  manager 

•/ 

is  constantly  to  increase  his  volume  of  pro- 
duction, and  depending  upon  his  success  in 
realizing  his  ambition,  we  find  that  he  is 
forced  to  add  new  equipment,  to  build  addi- 
tions, and  in  other  ways  to  place  himself  in 
position  to  supply  his  trade  with  their  re- 
quirements. This  gives  us  the  thought- -to 


34  MAXIMUM     PRODUCTION 

expand  so  as  to  produce  more,  it  is  necessary 
to  construct  that  which  will  make  a  greater 
production  and  an  increased  volume  of  sales 
possible.  This  construction  is  of  two  kinds, 
although  this  fact  is  not  generally  recog- 
nized, the  distinction  being  determined  by 
the  consideration  whether  the  construction 
is  something  altogether  new  or  simply  the 
changing  of  something  that  has  already  ex- 
isted. We  will  term  these  two  kinds,  A- 
New  Construction,  and  B--Keconstruction. 

In  every  plant  it  is  necessary  to  do  special 
work  for  customers,  for  which  a  price  is 
charged — another  element  which  we  must 
consider.  Still  another  is  made  up  of  such 
items  as  cannot  be  classed  with  any  of  the 
elements  which  have  just  been  pointed  out, 
and  as  consideration  will  show  that  such  an 
element  could  not  be  classed  as  a  revenue- 
producing  or  an  asset  element,  it  must  be 
classified  as  expense.  Our  division  of  en- 
deavor, common  to  all  industries,  would 
therefore  be  as  follows :- 

1.  Commercial  Production. 

2.  Maintenance. 

3.  Construction- 

A    New  Construction. 
B    Eeconstruction. 


ACCOUNTING   AND   MANAGEMENT  35 

(Elements  of  Production,  Continued) 

4.  Special   Work    Chargeable   to   Cus- 

tomers. 

5.  Expense. 

After  the  principal  elements  have  been 
pointed  out,  the  task  of  next  importance  is 
to  have  them  intelligently  control  the  num- 
berless details  that  are  met  with,  which  must 
be-switched  onto  one  or  more  of  the  five  main 
tracks  mentioned.  In  the  South  Terminal 
Station  in  Boston,  there  are  twenty-eight 
tracks  which  are  connected  with  the  outer 
network  of  tracks  by  switches,  and  upon  the 
correctness  with  which  these  switches  are 
manipulated  by  the  operators  depends  the 
safety  of  hundreds  of  passenger  trains  which 
enter  and  leave  this  station  daily.  There 
would  be  absolutely  no  excuse  for  an  oper- 
ator to  make  the  statement  that  he  was  not 
sure  which  one  of  the  twenty-eight  tracks  a 
certain  train  was  to  enter  upon.  Likewise, 
it  is  just  as  necessary,  in  order  to  prevent 
costly  mistakes,  false  impressions,  danger- 
ous conclusions,  etc.,  to  switch  the  details 
that  are  met  with  daily  onto  the  right  tracks. 
How  little  attention  has  been  given  to  this 
particular  consideration  of  the  subject,  how- 


36  MAXIMUM     PRODUCTION 

ever,  would  be  evident  to  anyone  who  could 
have  the  opportunity  of  placing  together,  for 
comparison,  the  handling  of  the  details  in  a 
hundred  plants.  It  is  safe  to  say  that  the 
variety  would  be  most  surprising  and  would 
be  one  means  of  showing  why  the  average 
enterprise  is  so  inefficient. 

The  much  discussed  topic  "depreciation' 
plays  such  an  important  part  in  the  proper 
understanding  of  the  elementary  factors  of 
a  manufacturing  business  that  it  was  deemed 
advisable  to  take  up  the  discussion  of  this 
subject  somewhat  in  detail. 

Keister,  an  authority  on  corporation  ac- 
counting, defines  depreciation  as:- 

The  actual  loss  upon  assets  which  are  diminishing 
in  value,  or  an  estimated  sum  charged  against  gross 
revenue,  which  amount  is  considered  sufficient  to  re- 
place the  capital  used  up  or  reduced  by  wear  and  tear. 

t 

L.  S.  Kandolph,  in  a  recent  paper  in  The 

Engineering  Magazine,  *  defines  it  as  fol- 
lows:— 

The  fall  in  value  from  any  cause  whatever.,  the  es- 
sential element  being  that  the  machine  or  structure 
becomes  obsolete. 

In  other  words,  the  common  understand- 

*  August,  1910.  Ethical  Aspects  of  the  Allowance 
for  Depreciation. 


ACCOUNTING    AND    MANAGEMENT  37 

ing  of  the  subject  seems  to  be  that  deprecia- 
tion is:- 

The  provision  made  to  maintain  the  book  value 
of  an  item  on  a  level  with  the  diminishing  value  of 
the  item,  due  to  its  usage  or  other  reasons. 

It  must  be  an  intensely  optimistic  mind 
that  can  see  no  depreciation  in  what  he  pos- 
sesses. Such  minds  do  exist,  for  the  author 
was  once  told  by  a  shrewd  manager  that 
there  was  no  such  thing  as  depreciation;  that 
as  long  as  he  kept  whatever  he  had  in  good 
condition,  it  was  as  good  as  the  day  he  pur- 
chased it  and  therefore  worth  what  had  been 
expended  for  it.  A  foundryman,  citing  the 
tumbling  barrels  in  his  cleaning  room  as  an 
example,  stated  that  he  considered  that  there 
was  no  wear  out  to  them,  for  whenever  staves 
were  broken,  he  promptly  replaced  them, 
which  made  the  barrels  as  serviceable  as 
ever.  Excellent  viewpoints,  both  of  them,  but 
in  error  just  the  same. 

Let  us  outline  a  case  which  will  serve  as 
an  illustration.  Assume  for  instance  that  a 
horse  had  been  purchased  for  $350  and  for  a 
period  of  years  did  all  that  any  horse  could 
do,  during  which  time  it  was  fed  regularly, 
shod  when  necessary,  occasionally  received 
a  "doctoring  up."  Eventually,  however,  on 


38  MAXIMUM     PRODUCTION 

account  of  the  age  of  the  horse,  disease,  or 
other  reasons,  it  has  to  be  sold,  $50  being  all 
that  it  will  bring,  and  to  take  its  place  an- 
other horse  has  to  be  purchased,  for  which  a 
price  of  $250  is  paid.  Assuming  the  con- 
sideration had  been  that  the  value  of  the 
horse  did  not  diminish,  in  which  case  no  de- 
preciation charge  was  ever  entered,  and  we 
find  in  our  assets  an  item  of  $350  year  in  and 
year  out.  Finally,  when  the  horse  is  sold  and 
the  new  one  purchased,  we  credit  the  assets 
for  the  salvage  of  $50,  but  charge  it  with  the 
$250  expended  for  the  new  horse,  so  that  the 
account  stands- 
Old  horse  $350.00 

New  horse  250.00 


Total    $600.00 

Eeceived  for  old  horse  50.00 


Balance  in  account   $550.00 

Value  of  new  horse  250.00 


Difference    $300.00 

Here  we  have  $300  in  the  assets  account 
for  which  there  is  no  value  whatever.  The 
only  thing  to  do  is  to  write  the  amount  into 
profit  and  loss  and  the  executive  can  say  to 
his  stockholders: 


ACCOUNTING    AND    MANAGEMENT  39 

Gentlemen :  I  bad  to  sell  our  old  horse  and  pur- 
chase a  new  one.  After  just  paying  $250  for  the 
new  horse,  I  find  the  value  of  the  old  horse  still  in 
our  assets,  so  will  have  to  carry  it  into  profit  and 
loss — hence  you  will  have  to  go  into  your  own  pock- 
ets this  year  to  pay  for  the  new  horse  and  in  addi- 
tion stand  the  difference  between  the  value  of  the 
old  horse  less  the  salvage  and  the  value  of  the  new 
horse. 

Sucli  an  explanation  would  certainly  not 
appeal  to  the  stockholders,  in  fact  their  reply 
would  probably  be: 

You  should  not  have  allowed  this  replacement  and 
loss  to  come  out  of  this  year.  If  the  decreasing  value 
of  the  horse  bad  been  offset  by  a  depreciation  charge 
and  this  amount  absorbed  yearly  by  our  cost  of  pro- 
duction, our  customers  would  have  paid  for  it  the 
same  as  they  pay  for  the  labor  and  material  which 
enters  into  their  product.  If  this  had  been  done,  not 
only  would  our  profit  have  been  about  the  same  dur- 
ing the  years  we  have  had  the  horse,  but  when  the 
time  came  to  purchase  the  new  one,  there  would  have 
been  enough  in  reserve  to  take  care  of  the  purchase 
without  calling  upon  us  to  do  so. 

From  this  statement,  two  conclusions  are 
forthcoming:- 

1.  The    customers,    not    the    stockholders, 
should  have  paid  for  the  horse. 

2.  By  making  "cost   of  production'     ab- 
sorb the  cost  of  the  old  horse,  less  the  sal- 
vage, the  expenditure  would  have  been  re- 
turned to  the  business. 


40  MAXIMUM     PRODUCTION 

A  study  of  this  leads  to  the  conviction  that 
one  phase  of  the  subject  which  has  never  re- 
ceived the  proper  amount  of  consideration  is 
the  fact  that  regardless  of  all  questions  of 
replacements,  diminishing  values,  wear  and 
tear  and  reserves,  whatever  is  produced  for 
commercial  use  sliould  absorb  all  that  en- 
ters into  making  that  production  possible, 
whether  it  is  the  wages  paid  to  the  work- 
men or  the  cost  of  the  machinery;  expendi- 
tures for  materials  used,  or  what  has  been 
spent  for  erecting  buildings.  In  other  words, 
whatever  is  produced  uses,  in  some  form  or 
other,  the  various  items  in  the  list  of  assets 
and  should  be  assessed  with  its  proportion  of 
the  cost  of  these  items.  The  wages  paid  the 
driver  of  the  horse  we  were  just  discussing 
is  entered  every  month  against  the  produc- 
tion of  the  month.  Why  not  some  part  of 
the  cost  of  the  horse!  If  the  $65  per  month 
paid  to  the  driver  should  be  left  out  of  the 
consideration,  through  an  error,  what  a  stir 
would  be  raised  because  of  the  carelessness 
of  some  clerk!  But  what  is  said  if  the  cost 
of  the  horse  stavs  buried  in  the  assets  month 

V 

in  and  month  out? 

A  foundryman  purchases  a  moulding  ma- 
chine for  $1,000,  which  he  promptly  proceeds 


ACCOUNTING    AND    MAXACOIKXT  41 

to  charge  to  his  assets.  He  engages  a 
moulder  to  operate  this  machine,  and  im- 
mediately the  machine  and  man  become  a 
unit  in  turning  out  production.  The  foun- 
dryman  charges  the  wages  paid  the  moulder 
against  the  production  of  the  machine,  being 
very  careful  that  the  distribution  of  the  labor 
is  as  correct  as  possible.  He  may  b$  of  the 
opinion,  as  many  foundrymen  are,  that  there 
is  very  little  depreciation  in  a  foundry- -he 
may  believe  there  is  none  at  all;  and  as  a  re- 
sult, a  very  small  charge  for  depreciation  is 
entered  against  the  production  of  man  and 
machine — perhaps  nothing.  If  it  is  logical 
to  charge  wages  against  the  production,  it  is 
just  as  logical  to  make  this  production  bear 
its  share  of  the  cost  of  the  machine.  The 
only  difference  existing  is  the  fact  that  the 
workman  receives  his  wa«;es  weeklv  at  so 

o  *• 

much  per  day  while  the  machine  is  paid  for 
in  advance. 

The  analogy  existing  between  man  and 
machine  is  worthy  of  mention.  Assuming  for 
purposes  of  comparison  that  a  man  contracts, 
with  a  concern  or  its  successors,  to  give  it  his 
services  for  a  period  of  ten  years,  at  $1,500 
per  year,  the  entire  sum  to  be  paid  upon  sign- 
ing the  contract,  which  provides  that  in  case 


MAXIMUM     PRODUCTION 

» 

the  man  is  able  to  continue  on  for  an  addi- 
tional five  years,  he  is  to  do  so  for  no  extra 
compensation,  the  man  in  turn  being  guar- 
anteed against  deductions  for  sickness,  vaca- 
tions, etc.,  the  concern  to  waive  all  claim  to 
any  part  of  the  $15,000  in  case  of  the  death  of 
the  man.  What  difference  is  there  in  the  con- 
dition when  a  machine  tool  is  purchased? 
The  builders  of  the  tool  contract  with  the 
concern  wanting  the  tool,  to  give  it  the  serv- 
ice of  the  machine  for  $15,000,  their  estimate 
being  that  the  machine  will  last  ten  years 
with  ordinary  usage.  If  the  machine  lasts 
fifteen  years,  no  extra  amount  is  forthcoming 
to  the  tool  builder.  If  the  tool  is  out  of  com- 
mission for  repairs  or  because  there  is  no 
work,  the  concern  gets  nothing  from  the  tool 
builder.  If  the  machine  wears  out  before  the 
stipulated  ten  years,  the  concern  loses,  al- 
though there  would  be  some  salvage  in  the 
disposition  of  the  discarded  machine,  which 
would  not  be  the  case  should  the  workman 
die— the  only  point  where  the  comparison 
does  not  hold. 

The  concern  might  feel  justified  in  taking 
the  stand  that  there  was  little  or  no  deprecia- 
tion as  far  as  the  machine  was  concerned,  but 
what  a  difference  there  would  be  as  regards 


ACCOUNTING    AND    MANAGEMENT  43 

the  man.  Not  one  of  the  120  months  would 
pass  without  a  charge  of  $125  being  assessed 
against  the  business  for  the  month.  If  the 
nature  of  the  work  was  such  as  to  admit  of 
its  being  distributed  to  some  specific  line  of 
production,  this  would  be  done;  if  this  were 
not  possible,  then  it  would  go  into  the  general 
expense  of  conducting  the  business,  but  it 
would  be  included  without  question,  for 
would  not  the  contention  be  that  the  amount 
expended  for  the  man  is  a  part  of  the  direct 
or  indirect  cost  of  production!  Most  as- 
suredly it  would,  and  rightly  so. 

Three  things  could  happen  to  the  man- 

l.--He  might  be  off  sick  from  time  to  time, 
occasionally  going  away  on  a  vacation  (cor- 
responding to  a  machine  being  down  for  re- 
pairs or  not  in  operation  because  of  lack  of 
work). 

2.— He  might  die  before  the  ten  years  are 
up  (corresponding  to  a  machine  being  dis- 
carded before  it  has  given  its  full  measure 
of  usefulness). 

3.— He  might  work  for  the  ten  years  and 
then  continue  for  a  few  years  longer  (cor- 
responding to  the  machine  lasting  longer 
than  anticipated). 

As  regards  No,  1,  it  is  evident  that  the 


44  MAXIMUM     PRODUCTION 

charge  must  be  made  against  general  ex- 
pense. In  the  case  No.  2,  if  the  man  dies  be- 
fore the  stipulated  time,  there  are  only  two 
courses  open  to  the  concern. 

A.- -Write  the  undistributed  portion  into 
profit  and  loss,  thereby  closing  the  transac- 
tion. 

B.— Allow  the  undistributed  portion  to  be 
absorbed,  year  by  year,  according  to  the 
schedule  originally  mapped  out. 

In  case  No.  3,  we  have  the  opposite  of  case 
No.  2— the  man  working  longer  than  was  ex- 
pected. As  the  $15,000  has  already  been  ab- 
sorbed by  the  ten  years  during  which  he 
worked,  there  remains  nothing  further  to  ab- 
sorb, consequently  the  services  of  the  man 
from  the  ten  years  until  he  stops  are  a  clear 
gain  to  the  company. 

Substituting  buildings,  machinery,  and 
general  equipment  for  the  man  cited  in  the 
illustration,  we  are  bound  to  reach  the  same 
conclusions,  and,  while  the  comparison  is  con- 
trary to  all  reason,  it  was  used  because  a 
person  interested  would  see,  in  comparing 
man  with  machine,  that  the  machine  would 
have  to  be  handled  in  the  same  manner  as 
the  man. 

An  opposite  viewpoint  is  equally  interest- 


ACCOUNTING    AXD    MAXAOKMKNT  1  •"> 

ing1.  If  the  concern  could  contract  for  the 
buildings,  all  machinery  and  equipment,  etc., 
on  the  basis  of  monthly  payments,  for  the 
period  of  years  corresponding  to  the  life  of 
the  items  (assets  on  a  man  basis),  it  is  ob- 
vious that  there  would  be  no  assets  at  all,  for 
the  concern  would  own  nothing  until  full  pay- 
ments had  been  made.  The  procedure  would 
be  most  simple.  The  cost  of  production  of 
each  month  would  absorb  the  monthly  pay- 
ments on  plant,  the  same  as  it  would  absorb 
wages,  cost  of  material,  and-  the  general  ex- 
penses. When  all  payments  had  been  made 
and  the  concern  owned  everything  free  and 
clear,  it  would  be  found  that  the  production 
had  paid  for  everything.  If  the  concern  had 
started  out  with  capital  to  purchase  their 
plant  but  had  contracted  as  above  outlined, 
it  would  also  be  found  that  the  original  cap- 
ital was  intact,  as  during  the  years,  assum- 
ing the  business  to  be  profitable,  the  cus- 
tomers would  have  paid  enough  to  take  care 
of  the  cost  of  the  production  including 
charges  for  plant,  plus  a  profit  for  the  stock- 
holders. 

From  these  two  illustrations— opposite  in 
their  nature-- it  is  evident  that  there  is  such 
a  thing  as  depreciation,  and  that,  as  the  cases 


46  MAXIMUM     PRODUCTION 

cited  made  no  reference  to  reserve  for  re- 
placements, diminishing  values,  etc.,  it  would 
seem  logical  to  make  the  assertion  that  these 
considerations  are,  after  all,  only  side  issues 
instead  of  principal  elements  of  the  subject 
that  have  so  long  been  considered  as  being 
the  reasons  why  it  was  necessary  to  figure 
depreciation. 

I  get  my  friends  to  advance  me  enough 
money  to  buy  land,  erect  buildings,  install 
machinery,  with  the  view  of  conducting  a 
manufacturing  business.  I  solicit  business, 
get  orders  which  I  proceed  to  fill,  charging 
labor,  material,  expenses  against  my  monthly 
productions.  My  friends  may  know  nothing 
of  the  particular  business  I  am  engaging  in; 
they  may  know  little  about  depreciation,  di- 
minishing values,  reserve  for  replacements, 
etc.,  but  they  do  know  that  they  want  the 
business  to  earn  what  was  invested;  and  how 
can  a  business  earn  the  investment  if  a  pro- 
portionate amount  is  not  a  part  of  my  produc- 
tion costs  ?  If  I  fail  to  do  this,  I  give  my  cus- 
tomers the  benefit  of  money  invested  in  my 
business  which  they  are  not  entitled  to,  for 
when  the  time  comes  for  buildings  to  be  re- 
placed, new  machinery  installed  in  place  of 
that  which  has  worn  out,  etc.,  I  find  no  funds 


ACCOUNTING   AND   MANAGEMENT  47 

on  hand  to  do  the  work  with,  without  going 
to  my  friends  to  " stake''  me  a  second  time. 
If  I  sell  my  plant,  it  would  not,  on  account 
of  its  run-down  condition,  bring  anything 
like  what  was  put  into  it  originally,  hence 
my  friends  would  lose  their  investment,  or 
at  least  the  greater  part  of  it.  If,  however, 
I  had  added  a  proportionate  amount  of  my 
friends '  investment  to  my  cost  of  production, 
for  which  my  customers  would  have  paid,  I 
would  have  invested  in  good  securities  funds 
with  which  to  do  my  replacing ;  or  I  could  sell 
out,  and  return  to  my  friends  the  money  they 
invested  phis  their  share  of  the  sale  of  the 
plant. 

My  theory  of  depreciation  is  therefore:- 
"The  absorption  by  production  of  all 
capital  investments,  in  proportion  to  the  use 
of  this  investment  entering  into  making  this 
production  possible,  and  the  consequent  in- 
surance of  a  return  to  the  business  of  the 
initial  expenditure. ' 

This  can  easily  be  seen  to  take  care  of  wear 
and  tear  due  to  usage,  diminished  value 
which  is  the  undistributed  portion  of  the  costs 
assessable  to  future  production,  reserve  for 
replacements  which  is  the  returning  to  the 
business  what  originally  was  a  capital  outlay. 


48  MAXIMUM     PRODUCTION 

In  determining  the  method  of  figuring  de- 
preciation, consideration  should  be  given  to 
the  following  :- 

l.--The  estimated  life  of  the  unit  must  be 
established. 

2.  --The  units  must  be  classified  according 
to  those  which  can  be  assessed- 

A.  —  Against  specific  production,  as  for 
instance  a  moulding  machine,  a  lathe,  or 
a  boiler. 

B.—  Against  classes  of  production,  as 
for  instance  a  building  for  a  certain  class 
of  production  or  the  crane  in  this  build- 
ing. 

C.—  Against  total  production,  as  for 
instance  a  crane  serving  the  whole  shop 
or  the  cupola,  fan,  charging  appliances, 
etc. 

3.  --For  2A,  a  rate  per  hour  should  be  as- 
certained which  can  be  charged  to  specific 
production  when  the  unit  is  in  use,  or  to  gen- 
eral expense  when  idle.     For  2B  and  2C,  a 
rate  per  month  can  be  established  which  can 
be  assessed  according  to  the  facts  in  the  case. 

In  establishing  these  rates  we  can  proceed 
as  follows  :--Let 

-Estimated  life  of  the  unit  in  months. 


H=  ^Estimated  life  of  the  unit  in  hours. 


ACCOUNTING    AND    MANAGEMENT  -49 


C—  Cost  of  the  unit. 

I—  Costs  of  installing  the  unit. 

on  the  cost  of  the  unit. 


S=  Possible  salvage  upon  being  declared 
obsolete. 

RH—Rate  of  depreciation  per  hour. 

RM=  =Rate  of  depreciation  per  month. 

Using  these  symbols,  we  may  then  formu- 
late the  monthly  and  hourly  depreciation 
rates  thus: 

Rule  1. 


=EM 


M 

Rule  2. 


H 


Regarding  the  recording  of  depreciation 
charges,  a  first  thought  would  be  that  the 
clerical  labor  involved  in  keeping  an  accu- 
rate record  of  depreciation  renders  a  careful 
accounting  impracticable.  To  keep  properly 
informed  as  to  existing  conditions,  to  have 
production  costs  absorb  capital  charges 
equitably,  it  is  necessary  to  keep  some  track 
of  the  items;  and  while  the  work  may  seem 
unnecessary  and  like  too  much  "red  tape,' 


50 


MAXIMUM     PRODUCTION 


it  will  be  found  profitable.  The  card  illus- 
trated on  this  page  (Figure  4)  would  serve 
as  an  excellent  means  of  keeping  track  of 
values,  the  reverse  side  being  ruled  to  show 
the  maintenance  cost,  date,  order  number, 
and  the  value  of  repairs.  Reserve  accounts 
should  be  opened  for  depreciation  charges, 


Department                                                         Account 

No.                      Name  of  Unit                                    Estimated  Life 

Made  by 
Purchased  from                      Date               Order  No.      Rate  of  Depreciation 

Date  Installed          Original  Cost        Interest          Installation        Total  Cost 

Betterments                                                 Depreciation 

V 

4-1 

a 

o 
Z 

u. 
C 

X' 

6 

fcH 

4> 

3 

£ 

rt 

4J 

O 

H 

<u 

+* 

n 
Q 

Amount 

Balance 

4) 

4-» 

a 
Q 

Amount 

Balance 

FIG.  4.   FORM  FOR  RECORD  OF  DEPRECIATION. 

which  should  be  properly  classified,  to  which 
should  be  credited  the  amounts  charged  ex- 
pense for  the  depreciation,  as  shown  by  a 
recapitulation  of  the  cards  illustrated.  In 
this  manner  the  original  values  of  the  asset 
items  are  left  intact,  being  offset  by  these 
credits  to  the  reserve  accounts. 


ACCOUNTING   AND   MANA(iI-  MKNT  51 

In  closing  this  chapter,  a  few  words  should 
be  said  with  further  reference  to  a  procedure 
for  asset  items  declared  obsolete  before  their 
estimated  life,  or  lasting  longer  than  antici- 
pated. As  was  stated,  two  courses  are  open : 
either  to  close  the  transaction  or  to  allow  it 
to  work  itself  out.  It  would  seem  that  the 
former  would  be  the  best  method  of  pro- 
cedure. A  contrary  opinion  by  H.  C.  Bentley, 
C.  P.  A.,  an  authority  on  accounting  practice, 
is  as  follows :- 

If  ten  percentum  per  annum  of  machinery  and 
equipment  is  reserved  for  depreciation  and  a  ma- 
chine is  replaced  three  years  from  the  date  purchased 
it  would  be  theoretically  correct  to  charge  the  re- 
serve account  with  only  thirty  percentum  of  its  cost, 
as  this  is  the  amount  reserve  has  been  credited  on 
account  of  this  particular  machine.  This  would 
necessitate  charging  "Surplus"  with  the  remaining 
seventy  percentum.  It  is  not  advisable  to  put  this 
theory  into  effect,  however,,  as  some  machines  will 
last  much  longer  than  tlie  ten  years,  while  others 
must  be  replaced  in  much  less  time  than  ten  years. 
It  thus  follows  that  such  inconsistencies  adjust 
themselves  in  the  long  run,  on  a  basis  that  is  quite 
as  equitable  as  if  an  elaborate  method  were  operated 
with  a  view  of  securing  more  accurate  results. 

In  the  illustration  cited  by  Bentley,  $7,000 
would  be  the  loss  in  the  year  in  which  the 
transaction  was  closed,  if  the  machine  had 


52  MAXIMUM     PRODUCTION 

cost  $10,000.  Assume  for  example  that  an- 
other machine,  with  an  estimated  life  of  ten 
years  and  costing  $10,000,  should  last  fifteen 
years.  At  the  end  of  the  ten  years,  the  $10,000 
would  stand  as  a  credit  to  the  reserve  for  de- 
preciation, with  five  years  ahead  of  the  ma- 
chine. This  would  mean  that  the  account 
should  have  been  credited  with  $666.67 
yearly  or  $6,667  in  the  ten  years,  leaving 
$3,333  to  be  absorbed  by  the  years  to  come. 
We  have  the  $10,000  in  reserve,  however— too 
much  under  the  conditions.  If,  then,  we 
open  a  " Values  Adjustment  Account'  and 
credit  it  with  this  $3,333,  the  value  on  hand, 
giving  this  value  to  reserve  for  depreciation 
through  a  charge  entry,  we  reduce  the  de- 
preciation credit  to  $6,667,  the  amount  it 
should  be.  We  simply  transfer  part  of  the 
reserve  credit,  corresponding  to  the  gain  to 
the  company,  from  one  account  to  another. 
Crediting  assets  and  charging  "Values  Ad- 
justment Account"  for  the  $7,000  loss,  leaves 
an  adjustment  of  $3,667  which  we  would 
credit  to  this  account  and  charge  to  profit 
and  loss. 

To  a  concern  desiring  to  get  at  the  truth  of 
things  this  would  be  the  proper  procedure, 
as  in  this  way  we  recover,  on  items  lasting 


ACCOUNTING    AND    MANAGEMENT  53 

longer  than  anticipated,  a  portion  of  the 
values,  in  depreciation  reserves  which  can  be 
used  to  assist  in  taking  care  of  the  losses  due 
to  units  declared  obsolete  before  the  expira- 
tion of  their  estimated  life. 


CHAPTER  IV 

MAINTENANCE,  NEW  CONSTRUCTION,  AND 
RECONSTRUCTION 

TT7E  now  come  to  a  discussion  of  what 
should  rightly  be  charged  to  the  ele- 
ments— Maintenance,  New  Construction  and 
Reconstruction — a  topic  that  has  caused 
many  a  bitter  argument,  is  confusing  to  many 
business  enterprises  and  in  addition  is  one 
upon  which  it  is  difficult  for  accountants  to 
unite  in  agreement  as  to  a  uniform  or  correct 
procedure. 

Our  first  consideration  is  the  fact  that  an 
expenditure  of  any  kind  either  increases  the 
value  of  what  we  may  have  and  is  therefore 
a  charge  to  our  assets,  or  it  does  not  increase 
value,  in  which  case  it  is  a  charge  against 
our  revenue. 

Viewed  in  this  light  we  can  define  Main- 
tenance as- 
All  expenditure  for  work  which  simply 
maintains,  without  increasing  in  any  way  the 
value  of  the  plant,  including  all  repairs  and 
renewals  to  real  estate,  buildings  and  equip- 


MAINTENANCE,  CONSTRUCTION,  RECONSTRUCTION     55 

ment,  being  the  expense  necessary  to  keep  a 
thing  in  condition,  operative,  and  useful. 

The  next  element,  New  Construction,  can 
be  defined  as  follows  :- 

All  expenditure  for  work  which  increases 
(instead  of  maintaining)  the  value  of  the 
plant,  such  as  betterments,  extensions  or  ad- 
ditions to  real  estate,  buildings  and  equip- 
ment. 

The  element  Reconstruction  can  be  defined 
as  follows  :— 

All  expenditure  for  work  which  neither 
increases  nor  maintains  the  value  of  the 
plant,  including  any  changing  of  what  al- 
ready exists  which  is  not  undertaken  because 
it  is  absolutely  necessary  but  voluntarily  for 
some  resultant  advantage.  To  include  also 
expenditures  of  an  extraordinary  nature, 
which  may  affect  maintenance. 

Maintenance  would  naturally  be  a  charge 
against  revenue;  New  Construction  would  be 
a  charge  to  our  assets,  while  Reconstruction, 
neither  maintaining  nor  increasing  value, 
would  also  be  a  charge  against  revenue.  It 
might  be  well  to  state  in  this  connection  that 
expenditures  for  Reconstruction  or  Mainte- 
nance classed  as  Reconstruction,  should  not 
be  entirely  absorbed  by  the  month  in  which 


56  MAXIMUM     PRODUCTION 

they  are  made.  Items  that  are  chargeable  to 
Reconstruction  are  generally  of  an  extraordi- 
nary nature,  and  it  is  hardly  fair  to  make  any 
one  month  absorb  the  entire  cost.  This 
should  be  spread  over  a  period  of  months  to 
be  decided  upon  according  to  the  facts  in  the 
case. 

It  would  appear  as  if  the  matter  of  correct 
charging  would  not  be  difficult,  but  the  task 
becomes  complicated  in  the  absence  of  a  well 
defined  way  of  handling  the  various  cases  as 
they  come  up,  so  that  the  problem  is  to  out- 
line some  procedure  for  determining  a  divid- 
ing line  between  charges  to  our  assets  and 
charges  against  revenue,  in  which  respect 
misconception  has  done  no  end  of  harm  to  in- 
dustrial undertakings,  as  a  great  many  know 
— to  their  sorrow. 

One  manager  whose  whole  aim  and  pur- 
pose is  to  keep  cost  down,  will  oftentimes 
allow  this  desire  to  get  the  better  of  his  judg- 
ment, and  as  a  result  items  which  should  be 
charged  against  revenue  are  classified  as 
assets.  Another  manager,  desirous  of  getting 
at  the  true  showing,  regardless  of  the  effect, 
will  make  revenue  stand  such  items  as  are  a 
legitimate  charge  against  it.  In  other  cases 
what  one  manager  considers  a  charge  against 


1  ;•— >  V/  -L       VV  \J  A-l  kJ  -1-  VI.  Vv  ±.  *J      t-A»     W  A  A  I*  A.   W.  V/      Ct,  «— ,  ( 


MAINTENANCE.  CONSTRUCTION,  RECONSTRUCTION      ">T 

revenue,  another  will  feel  perfectly  justified 
in  treating  as  an  asset.  It  therefore  seems 
as  if  the  deciding  factor  as  regards  questions 
affecting  assets  and  revenue,  in  many  in- 
stances is  either  personal  opinion  or  the  de- 
sire of  the  executive,  rather  than  an  effort  to 
outline  a  uniform  policy;  consequently  it  is 
but  natural  that  we  should  find  so  many  dif- 
ferent methods  in  practice. 

Assets  in  the  strictest  acceptance  of  the 
term,  should  mean  one  of  two  things: 

1. — Money  on  hand  or  its  equivalent. 

2.-  -That  which  can  be  converted  into 
money. 

This  establishes  the  fact  that  assets  are  of 
two  kinds,  quick  and  fixed.  Cash  in  bank 
and  accounts  receivable  would  come  under 
the  first  class,  while  real  estate,  buildings, 
and  equipment  would  be  classed  as  fixed  as- 
sets. If  this  is  a  correct  interpretation  of 
what  assets  are,  there  is  no  excuse  for  rail- 
roading into  the  assets  accounts,  items  which 
cannot  pass  this  conversion  test;  for  an  item 
does  not  add  a  cent's  worth  of  value  to  the 
plant,  if  the  amount  expended  cannot  be  con- 
verted back  into  money.  This  test  can  be  re- 

»/ 

duced  to  a  more  practical  basis  in  a  great 
many  instances  by  the  question:  "Can  I  dis- 


58  MAXIMUM     PRODUCTION 

pose  of  it  for  the  money  I  have  expended  ?" 
The  answer  to  this,  if  the  attempt  to  get  at 
the  truth  is  a  conscientious  one,  will  deter- 
mine how  the  charge  is  to  be  made. 

The  question  whether  assets  values  should 
be  considered  from  the  standpoint  of  the 
"going  concern"  or  the  "forced  sale'  is  en- 
titled to  some  consideration.  I  well  remem- 
ber attending  a  forced  sale  of  a  plant  which 
brought  less  than  $10,000  under  the  hammer, 
although  the  assets  were  appraised  at  nearly 
$100,000.  Investigation  developed  the  fact 
that  the  plant  was  old  and  run  down ;  no  pro- 
vision had  ever  been  made  for  depreciation; 
the  management  had  been  of  the  "guess- 
work" kind  and  the  appraisers  had  valued 
each  item  at  the  cost  to  replace  it,  conse- 
quently the  assets  were  all  out  of  proportion 
to  their  true  value,  although  $10,000  was  less 
than  what  the  plant  may  have  been  worth. 

It  makes  a  remarkable  difference  in  the 
amount  that  can  be  realized,  whether  a  con- 
cern does  not  particularly  care  whether  it 
sells  or  not  or  whether  it  is  forced  to  sell.  In 
the  first  case  it  can  demand,  and  no  doubt 
secure,  a  much  larger  figure  than  would  be 
the  case  if  the  creditors  took  a  hand.  With 
the  forced  sale  we  find  conditions  that  can  be 


MAINTENANCE,  CONSTRUCTION,  RECONSTRUCTION     59 

classed  as  unnatural.  The  buyers  pay  little 
attention  to  correct  values— they  are  out  for 
bargains,  knowing  full  well  that  the  con- 
sideration of  prime  importance  to  the  cred- 
itors, first,  last  and  all  the  time  is — the  set- 
tlement. 

A  doctor  asks  a  certain  fee  for  an  opera- 
tion, a  fee  on  a  par  with  that  asked  by  other 
doctors.  The  fact  that  a  prospective  patient 
refuses  to  pay  this  fee  is  no  evidence  that 
the  services  are  not  worth  what  was  asked 
for  them,  for  he  will  find  plenty  of  patients, 
if  he  is  successful,  who  are  willing  to  pay  the 
regular  amount.  If  the  doctor  is  "up  against 
it, ' '  he  may  consent  to  take  the  case  for  much 
less  than  the  regular  price ;  but  this  does  not 
by  any  means  represent  the  true  value  of 
surgical  services,  although  as  far  as  the  doc- 
tor himself  is  concerned  his  condition  forces 
his  value  down  and  that  is  as  far  as  the  in- 
fluence can  be  made  to  go.  My  neighbor 
buys  a  piano  for  $600,  has  it  a  year  but  uses 
it  very  little.  His  wife  dies  and  he  decides 
to  sell  out  everything.  I  want  the  piano, 
and  as  we  have  been  firm  friends,  he  consents 
to  sell  it  to  me  for  $200.  That  he  sold  it  to 
me  for  this  figure  is  no  indication  that  it  is 
worth  only  $200,  for  I  could  no  doubt  get 


60  MAXIMUM     PRODUCTION 

nearly  as  much  as  was  originally  paid  for  it. 
Friendship  and  a  desire  for  a  quick  sale,  re- 
gardless of  value,  were  the  underlying  mo- 
tives contributing  to  the  decline  in  value  to 
$200— a  false  value,  as  everyone  can  appreci- 
ate. So  with  the  forced  sale—the  values  are 
false  and  should  not  be  considered  as  a  guide 
in  arriving  at  an  assets  value. 

//  an  item  is  useful  and  necessary;  if  it 
facilitates  production  or  is  a  business  getter; 
if  it  is  something  that  can  no  doubt  be  used 
to  advantage  by  a  prospective  buyer,  it  is 
something  of  value  and  can  be  added  to  our 
assets;  for  it  is  safe  to  assume  that  it  would 
find  a  buyer  at  the  price  asked.  If  any  doubt 
exists,  however,  its  cost  should  be  absorbed 
by  revenue— a  safe  and  sane  procedure — 
keeping  out  of  the  assets  questionable  values, 
which  if  included  tend  only  to  mislead,  often- 
times with  results  not  at  all  gratifying. 

After  all,  the  main  thing  to  consider  is  that 
as  long  as  "cost  of  production"  is  to  absorb 
everything,  it  is  playing  safe  to  write  all 
doubtful  cases  into  cost;  and  if,  in  addition 
to  this,  the  attempt  to  have  the  cost  absorb 
items  that  can  be  rightly  considered  as  assets 
is  an  honest  one,  the  values  will  not  be  far  off. 

Definitions  and  a  general  outline  as  to  pro- 


MAINTENANCE,  CONSTRUCTION,  RECONSTRUCTION      Gl 

cedure  are  sometimes  easy  to  understand,  but 
when  we  come  to  deal  with  specific  cases  we 
may  find  that  the  proper  handling  is  still 
rather  difficult  on  account  of  the  various  ways 
of  looking  at  the  subject.  I  know  of  one  con- 
cern making  a  standard  type  of  machine 
which  for  years  has  been  in  successful  com- 

* 

petition  with  other  makes,  where  the  policy 
is  to  charge  all  patterns  and  drawings  on  all 
new  work  to  the  expense  account  in  the 
month  in  which  they  are  made.  In  another 

•) 

concern  where  the  designs  have  been  con- 
stantly changing,  patterns  and  drawings 
have  been  charged  to  assets,  subject  to  a 
ridiculously  low  depreciation  rate,  and  as  a 
result  both  accounts  are  far  in  excess  of 
what  they  should  be.  Both  ways  cannot  be 

•/  v 

right;  in  fact  both  may  be  wrong,  for  which 
reason  it  seems  advisable  to  get  down  to  a 
discussion  of  cases. 

CASE  1. MAKING  NEW  \VOOD  FLASKS. 

A. — Stock  size,  for  general  use  and  not  re- 
placing old  or  discarded  flasks- 

This  transaction  can  hardly  be  considered 
as  in  any  way  increasing  value,  first  because 
of  the  short  life  of  wood  flasks,  and  second 
because  the  usual  foundry  wood-flask  equip- 


62  MAXIMUM     PRODUCTION 

ment  is  about  ready  to  be  used  for  firewood, 
and  from  the  standpoint  of  a  convertible  se- 
curity is  worth  next  to  nothing.  Wood  flasks 
are  constantly  wearing  out,  new  ones  being 
added  to  take  their  places.  If  they  vary 
much  as  to  size,  is  this  sufficient  grounds  to 
class  them  as  assets?  Would  it  not  be  bet- 
ter to  consider  them  as  maintaining  the  value 
of  the  wood-flask  equipment,  which  if  en- 
tered as  assets  should  be  represented  by  a 
nominal  figure  to  cover  the  whole  equipment, 
subject  to  change  only  as  the  business  ex- 
pands? It  would  seem  from  the  above  that 
the  case  should  be  classed  as  a  Maintenance 
item. 

B. — For  a  special  line  of  work — 
It  follows  that  it  is  the  special  work  that 
makes  this  flask-making  necessary.  Value 
has  not  been  increased,  because  the  flasks 
will  no  doubt  be  useless  when  the  special 
work  has  been  done.  Nor  has  value  been 
maintained  according  to  our  definition,  con- 
sequently this  charge  should  be  considered 
as  expense  and  absorbed  by  the  special  work 
to  be  made  in  them. 

C. — To  replace  old  and  worn-out  flasks- 
1. — If  stock  size  for  regular  use,  the  expen- 
diture would  be  a  Maintenance  item  as  it 


MAINTENANCE,  CONSTRUCTION,  RECONSTRUCTION      63 

does  not  increase  value  to  any  extent,  simply 
maintains  it. 

2.- -If  for  special  work,    it    would    be    a 
charge  against  the  work  the  same  as  IB. 

CASE   2. MAKING  NEW  IKON   FLASKS. 

A. — Standard  sizes  for  general  use  and 
not  replacing  old  or  discarded  flasks- 
Iron  flasks  under  the  condition  outlined 
no  doubt  increase  value.  They  are  necessary 
and  useful;  they  facilitate  production  and 
are  something  a  prospective  buyer  could  use 
to  advantage,  and  as  they  possess  a  much 
greater  degree  of  permanency  than  wood 
flasks,  we  can  safely  class  them  as  a  New 
Construction  item. 

B. — For  a  special  line  of  work — 
Eemarks  at  IB  would  apply  if  the  flasks 
would  be  of  little  value  after  the  special 
work  was  made  in  them.  Should  they  be 
so  designed,  however,  as  not  only  to  take 
care  of  the  special  work  but  to  be  useful  for 
general  purposes,  then  it  would  be  well  to 
charge  part  of  the  cost  against  the  special 
work  and  the  balance  to  New  Construction. 

C. — To  replace  old  and  worn  out  flasks- 
Eemarks  at  1C  would  apply  here. 


64:  MAXIMUM     PRODUCTION 

Note. — Care  must  be  exercised  in  deter- 
mining whether  a  new  flask  is  a  replacement, 
or  for  special  work,  or  an  addition  to  the 
existing  equipment.  The  proposition  is 
usually  a  confusing  one,  for  there  have  been 
cases  where  new  flasks  have  been  made  as  a 
replacement  but  put  in  as  new  equipment, 
because  the  flask  was  new  and  also  because 
of  the  fact  that  the  ones  they  replaced  had 
been  lost  sight  of.  If  not  rightly  looked 
after,  the  proposition  will  soon  become  hope- 
lessly confused. 

CASE   3. MAKING  A  LOT  OF  WOOD   FLASKS,  WITH 

IRON  BARS,  WHICH  ON  ACCOUNT  OF  THEIR 
CONSTRUCTION  WILL  LAST  A  REASONABLE 
LENGTH  OF  TIME. 

The  procedure  outlined  for  2  ABC  seems 
upon  consideration  to  take  care  of  this  case 
also,  although  the  life  of  such  flasks  would 
be  shorter  than  iron  flasks. 

CASE   4. A   NEW   BELT   TO   REPLACE   AN   OLD   ONE. 

As  this  belt  was  added  to  keep  the  trans- 
mission equipment  in  good  running  order,  it 
would  have  to  be  considered  a  Maintenance 
item,  according  to  our  definition  given  at  the 
beginning  of  this  chapter. 


MAINTENANCE^  CONSTRUCTION,  RECONSTRUCTION      G5 

CASE    5. A    NEW   BELT   PLACED   ON   A    NEWLY   IN- 
STALLED   MACHINE. 

The  new  machine  adds  value,  and  being 
a  security  that  can  be  converted  into  money, 
is  an  asset.  The  belt  being  a  component 
part  of  this  machine  along  with  the  counter- 
shaft would  naturally  be  included  in  the  cost 
of  the  installation  and  also  considered  an 
asset,  consequently  a  New  Construction  item. 

CASE    6. CHANGING    THE    LOCATION    OF    A 

DEPARTMENT. 

A  move  of  this  kind  neither  adds  value  nor 
maintains  it — as  we  would  have  just  as  much 
value  after  the  change  as  before;  conse- 
quently, the  cost  of  the  work  would  be 
chargeable  to  Eeconstruction  and  absorbed 
by  expense. 

CASE  7. CHANGING  THE  LOCATION  OF  A  DEPART- 
MENT^  AND   ADDING   A    NEW   DEPARTMENT. 

As  consideration  will  show,  we  have  a 
transaction  of  which  part  neither  adds  nor 
maintains  value  and  part  adds  value ;  hence 
it  affects  both  Eeconstruction  and  New  Con- 
struction, the  cost  of  the  changing-  and  the 
addition  to  be  kept  separate  for  correct 
charging. 


66  MAXIMUM     PRODUCTION 

CASE   8. PAINTING  THE   BUILDINGS  AND   WHITE- 
WASHING THE  INTEEIOK. 

In  this  instance  the  work  is  done  to  main- 
tain value,  but  as  the  expense  is  of  an  ex- 
traordinary nature  it  would  be  hardly  fair  to 
charge  the  cost  against  the  month  in  which 
the  work  is  done,  for  which  reason  it  should 
be  classed  as  a  Reconstruction  item  and  the 
cost  spread  over  a  period  of  months,  to  be 
decided  upon  as  being  just  and  equitable, 
Eeconstruction  to  be  credited  and  Mainte- 
nance charged  with  the  monthly  portions  of 
the  amount  so  apportioned  until  the  whole 
sum  has  been  accounted  for  and  dis- 
tributed. 

CASE  9. TAKING  DOWN  A  LINE  SHAFT  AND  PLAC- 
ING   IT    IN    ANOTHER    POSITION. 

See  Case  6. 

CASE  10. EXTENDING  LINE  SHAFT  FOR  AN  EXTRA 

PULLEY  AND  BELT. 

Here  we  have  another  instance  of  adding 
something  which  would  pass  our  conversion 
test,  consequently  we  can  class  this  as  -a 
New  Construction  item  under  the  definition 
set  forth  at  the  beginning  of  the  chapter. 


MAINTENANCE,  CONSTRUCTION,  RECONSTRUCTION     67 

CASE    11. RELOCATING    MACHINERY,    WITH    THE 

VIEW  TO  IMPROVING  THE  EQUIPMENT  FACILI- 
TIES, MAKING  NO  CHANGES  IN  TRANSMISSION 
ARRANGEMENTS  EXCEPTING  WHERE  NECES- 
SARY TO  CONNECT  THE  DRIVES  PROPERLY. 

In  this  case  we  move  what  is  already  con- 
sidered as  something  of  value,  from  one 
place  to  another,  and  add  what  may  be  neces- 
sary to  effect  proper  transmission;  but  as  it 
is  more  than  likely  that  what  was  added  re- 
placed worn-out  parts,  it  is  proper  to  treat 
this  case  as  effecting  Reconstruction. 

Should  it  happen  that  quite  a  little  new 
material  had  to  be  added  as  an  addition,  not 
a  replacement,  it  being  necessary  to  discard 
some  of  the  equipment  previously  used,  then 
the  case  should  be  handled  by  charging  Re- 
construction for  the  relocating  and  New 
Constructions  for  the  additions,  crediting 
the  latter  for  the  present  value  of  this  dis- 
carded material. 

CASE  12. RELOCATING  MACHINERY,  PUTTING  ON 

ALL    NEW    BELTS. 

Here  we  have  a  transaction  affecting  both 
Reconstruction  and  Maintenance,  for  as  re- 
gards the  relocation,  we  neither  add  nor 
maintain  value,  while  replacing  belts  would 


68  MAXIMUM    PRODUCTION 

be  a  move  to  maintain  value.  To  save  need- 
less accounting  however,  the  whole  cost 
should  be  charged  against  Reconstruction 
and  spread  over  a  period  of  months. 

CASE    13. RELOCATING   MACHINERY,   INSTALLING 

MOTOR  DRIVES  TO  REPLACE   BELT  DRIVES. 

In  this  case  we  can  see  that  Reconstruction 
is  affected  for  the  cost  of  relocating,  but  that 
we  have  also  added  something  of  value  in 
the  way  of  new  motors,  consequently  for  the 
latter  we  would  charge  New  Construction 
and  credit  it  with  the  present  value  of  the 
belts. 

CASE     14. INSTALLING    A    PRODUCER-GAS    PLANT 

TO   REPLACE   A   STEAM    EQUIPMENT. 

This  is,  of  course,  a  replacement,  but  not 
made  to  maintain  value  nor  in  the  sense  that 
we  relocate  a  department  or  machine.  We 
eliminate  something  of  value  and  add  some- 
thing of  value.  The  difference  in  values 
must  be  considered,  which  gives  rise  to  the 
query  regarding  which  of  the  following 
values  should  be  used- 

1.-  -The  difference  between  the  present 
value  of  the  steam  equipment  and  the  cost 
of  the  gas  plant. 


MAINTENANCE,  CONSTRUCTION,  RECONSTRUCTION     6'J 

2.-  -The  difference  between  what  we  are 
allowed  for  the  steam  plant  and  the  cost  of 
the  gas  plant. 

3.-  -The  difference  between  what  we  pay 
for  the  gas  plant  and  what  we  sell  the  steam 
plant  for. 

The  steam  plant  was  put  in  the  assets, 
when  new,  at  a  certain  figure.  It  now  has  a 
value,  less  than  the  original  amount  by  what 
has  been  absorbed  by  cost  of  production; 
consequently  the  balance  remains  to  be  re- 
turned to  the  business.  We  cannot  leave  this 
amount  in  our  assets  because  we  do  not  have 
this  value  in  any  convertible  security ;  conse- 
quently we  should  charge  New  Construction 
for  the  cost  of  the  gas  plant—charging  "Val- 
ues Adjustment  Account'1  and  crediting  As- 
sets for  the  present  value  of  the  steam  plant. 
What  we  are  allowed  in  exchange  or  receive 
for  selling  the  steam  plant  would  be  a  credit 
to  "Values  Adjustment  Account." 

CASE    15. EXTENDING   THE    CRANE   RUNWAY  AND 

REPAIRING    THE     REGULAR    RUNWAY    AT     THE 
SAME   TIME. 

This  transaction  will  be  seen,  upon  consid- 
eration, to  involve  New  Construction  for  the 
value  of  the  extension,  and  Maintenance  for 


70  MAXIMUM     PRODUCTION 

the  repairs  on  the  regular  runway.  Value 
is  increased  on  the  one  hand  and  maintained 
on  the  other. 

CASE  16. REPLACING  THE  EQUIPMENT  OF  METAL 

PINIONS  WITH  EAWHIDE  PINIONS  AND  IN  CER- 
TAIN PLACES  SUBSTITUTING  STEEL  GEARS  FOR 
IRON  GEARS. 

As  the  cost  of  the  work  originally  placing 
these  gears  and  pinions  in  position  was  ab- 
sorbed by  assets,  the  work  of  replacing  them 
neither  maintains  nor  increases  value ;  conse- 
quently it  involves  Eeconstruction.  The  cost 
of  the  new  material  less  the  present  value  of 
the  discarded  pinions  and  gears  is  a  just 
charge  to  New  Construction. 

CASE   17. REWIRING      THE      PLANT;      REPAIRING 

WHAT  DOES  NOT  NEED  REPLACING;  CONCEAL- 
ING THE  WIRES;  SUBSTITUTING  TUNGSTENS 

FOR  THE  INCANDESCENTS  AND  FLAMING  ARCS 
FOR  THE  ORDINARY  ARCS  IN  USE,  AT  THE 
SAME  TIME  WIRING  UP  A  NEW  DEPARTMENT 
JUST  CONSTRUCTED. 

This  case  is  rather  a  confused  proposition, 
involving  New  Construction,  Eeconstruction 
and  Maintenance,  as  we  add  value,  maintain 
value  and  do  neither.  Extreme  accuracy 


MAINTENANCE,  CONSTRUCTION,  RECONSTRUCTION      71 

would  be  possible  but  impracticable. 
The  procedure  would  seem  to  be: 
charge  Eeconstruction  with  all  of  the  cost 
of  the  work,  less  the  work  in  the  new  depart- 
ment, which  would  be  a  charge  to  New  Con- 
struction, and  increase  the  assets  by  the  dif- 
ference in  values  between  the  tungstens  and 
flaming  arcs  and  the  lamps  discarded. 

CASE   18. PUTTING  IN  A  NEW  CUPOLA  SHELL  TO 

REPLACE  ONE  WORN  OUT;  ADDING  TWO  OR 
THREE  EXTRA  COURSES  TO  THE  STACK;  IN- 
CREASING THE  NUMBER  OF  BLAST  CONNEC- 
TIONS AND  RELINING  THE  CUPOLA. 

We  can  outline  the  procedure  for  this  case 
as  follows — 

Putting  in  new  shell.       To  Maintenance  on 
Eelining  cupolas.  account  of  value 

Adding  extra  courses.         being  maintained. 
Increasing  connections.  To  New  Construc- 
tion on  account 
of  value  being 
added. 

the  cost  of  the  work  less  the  value  of  the  new 
items  to  be  charged  to  Eeconstruction  on 
account  of  the  work  being  of  an  extraordi- 
nary nature,  and  spread  over  a  period  of 
months. 


72  MAXIMUM     PRODUCTION 

CASE  19. THROWING  OUT  A  MOULDING  MACHINE 

WHICH   HAS   NOT    MEASURED   UP  TO   EXPECTA- 
TIONS  AND  INSTALLING  A  BETTER  TYPE. 

While  adding  something  of  value,  we  are 
also  losing  something  of  value.  To  handle 
this  transaction  properly  so  as  to  produce  a 
true  showing,  the  procedure  should  be  along 
the  same  lines  outlined  in  Case  14. 

CASE    20. MAKING    NEW    PATTERNS    AND    DRAW- 
INGS. 

A.- -For  an  improved  type  of  a  standard  ma- 
chine. 

B. — To  suit  the  wish  of  a  customer. 

C. — To  correct  a  fault  existing  in  the  design 
of  a  machine. 

D. — For  a  new  and  untried  type  of  machine. 

E. — For  maintenance  of  equipment. 

F. — For  new  equipment. 

The  correct  handling  of  the  cost  of  pat- 
terns and  drawings  has  always  been  a  source 
of  considerable  discussion.  A  statement 
showing  "net  worth' '  which  included  all  pat- 
terns and  drawings  would  be  open  to  ques- 
tion ;  in  fact,  an  executive  in  favor  of  charg- 
ing his  own  patterns  and  drawings  to  assets 
would  be  the  last  man  to  sanction  the  pur- 
chase of  another  concern  without  first  satis- 


MAINTENANCE,  CONSTRUCTION,  RECONSTRUCTION     73 

fying  himself  that  he  was  not  going  to  pay 
for  patterns  and  drawings  that  were  of  little 
value  to  his  business,  which  gives  rise  to  the 
query:  what  patterns  and  drawings  are  of 
value  to  a  business? 

In  one  sense  it  is  doubtful  if  any  are.  New 
manufacturing  processes,  new  tools,  better 
designs,  the  failure  of  designs  to  be  a  com- 
mercial success,  and  numerous  other  reasons, 
all  contribute  to  make  patterns  and  drawing 
a  doubtful  quantity  as  regards  their  value. 
Uncertainty  is  another  factor.  What  might 
be  considered  an  asset  may  prove  a  failure, 
and  on  the  other  hand  what  was  considered 
problematical  and  not  regarded  as  an  asset 
may  prove  to  be  a  great  success.  It  seems, 
therefore,  as  if  no  definite  method  of  proce- 
dure can  be  outlined.  If,  however,  the  view- 
point is  not  so  much  the  desire  to  get  as 
much  as  possible  into  the  assets  as  it  is  to 
make  production  absorb  capital  charges,  it 
makes  it  unnecessary  to  "split  hairs "  in  de- 
ciding just  how  to  proceed.  If  the  cost  is 
absorbed  at  once,  revenue  takes  care  of  what 
would  otherwise  be  a  capital  investment- 
the  safest  way.  If  the  cost  is  considered  an 
asset  and  spread  over  a  period  of  years, 
capital  investment  is  returned  slowly  (in  one 


74  MAXIMUM     PRODUCTION 

case  I  know  of,  3  per  cent  annually  on  de- 
creasing balances  is  considered  a  correct  pat- 
tern and  drawing  depreciation)  sometimes 
much  more  slowly  than  the  corresponding 
discarding  of  patterns  and  drawings — a  pro- 
cedure that  assesses  each  year,  after  a  cer- 
tain period,  with  an  unjust  cost. 

Getting  back  to  the  case  outlined,  a  pro- 
cedure might  be  outlined  as  follows : 

20A. — As  the  type  of  machine  is  standard 
and  the  improvement  made  only  after  it  has 
been  demonstrated  that  it  will  make  the  de- 
sign more  efficient,  it  is  safe  to  consider  this 
an  asset.  The  estimated  life  of  the  design, 
however,  should  not  be  placed  at  a  figure 
which  is  equivalent  to  saying  that  it  will 
never  be  declared  obsolete.  It  must  be  re- 
membered, as  pointed  out  in  the  preceding 
chapter,  that  the  whole  aim  and  purpose  of  a 
depreciation  allowance  is  to  have  production 
refund  capital  investment,  and  the  more 
quickly  it  is  returned,  the  better. 

20B. — This  is  obviously  a  charge  against 
the  contract,  as  it  is  the  customer's  wish 
which  makes  the  change  necessary.  He  may 
or  may  not  be  willing  to  pay  for  this  change, 
but  this  does  not  alter  the  fact  that  value  is 
not  increased  nor  is  it  maintained. 


MAINTENANCE,  CONSTRUCTION,  RECONSTRUCTION      75 

20C. — If  a  fault  exists  in  the  design,  it 
means  that  the  security  is  not  as  valuable 
as  it  should  be ;  consequently  to  make  it  valu- 
able to  the  trade  (which  is  only  another  way 
of  saying  that  it  is  of  value  to  us)  we  must 
expend  enough  to  make  it  so — hence  the  item 
is  a  charge  against  revenue. 

20D. — Here  we  have  an  element  of  chance. 
It  is  possible  that  the  type  will  be  a  success 
-it  is  just  as  likely,  however,  to  be  a  failure. 
We  do  not  know  as  yet  whether  we  have  any- 
thing of  value  or  not ;  consequently  it  is  not 
playing  safe  to  call  it  convertible  security,  if 
it  is  not  known  that  such  is  or  will  be  the 
case.  The  safest  plan  is  therefore  to  make 
the  current  year  stand  the  expense,  one- 
twelfth  per  month,  if  the  expense  exceeds  a 
figure  decided  upon,  or  the  current  month  if 
the  cost  is  a  small  one. 

20E.  and  F. — The  cost  of  patterns  and 
drawings  for  the  new  equipment  would  nat- 
urally be  a  New  Construction  item,  while  if 
for  Maintenance,  revenue  would  have  to  ab- 
sorb it. 


CHAPTER  Y 

SYSTEMATIC       PROCESSING,      ASSEMBLY, 

AND  ERECTION 

A  MAN  once  told  me  that  a  manufacturer 
^  *•  who  was  not  conducting  his  affairs  in 
a  manner  to  insure  maximum  results  had 
absolutely  no  right  to  be  in  business ;  that  he 
should  step  down  and  out  and  give  way  to 
some  one  who  would  fully  appreciate  the 
possibilities  and  take  every  advantage  of 
them — who  would  leave  no  stone  unturned 
until  a  full  measure  of  success  was  his. 

Such  a  statement  might,  on  first  thought, 
seem  rather  startling;  in  fact,  it  impressed 
me  to  such  an  extent  that  I  asked  a  number 
of  manufacturers  how  they  felt  toward  those 
who  were  conducting  their  business  in  an 
unsystematic  manner.  One  replied  by  say- 
ing that  he  had  just  been  advised  that  his  bid 
on  a  large  contract  had  been  rejected  because 
of  a  much  lower  tender  from  some  other  con- 
cern ;  that  he  was  in  a  position  to  know  that 
the  work  could  not  be  made  at  a  profit  by 
his  competitor  at  the  price  he  quoted.  He 

76 


PROCESSING,    ASSEMBLY,   AND    ERECTION  77 

said  that  he  knew  how  much  labor  and  mate- 
rial the  work  would  take,  and  as  his  burden 
rate  was  accurate,  he  knew  that  his  bid  was 
actual  cost  plus  a  reasonable  margin  of 
profit;  but  that  his  competitor  got  the  work 
and  would  lose  money  while  he  lost  the  work 

•> 

and  an  opportunity  to  make  a  profit. 

Another  stated  that  he  had  spent  consider- 
able time  and  money  in  an  effort  to  organize 
and  systematize  his  business  so  as  to  enable 
him  to  secure  maximum  results ;  that  he  knew 
where  his  losses  ceased  and  his  profits  be- 
gan, as  well  as  just  what  he  would  have  to 
accomplish  in  the  way  of  a  production;  and 
that  he  was  willing  to  give  to  any  of  his 
competitors  the  benefit  of  this  expenditure 
of  time  and  money,  if  it  would  result  in  a 
more  intelligent  competition.  While  he  real- 
ized that  his  competitor  who  conducts  his 
business  in  a  careless  manner  is  destined 
either  to  be  forced  to  put  his  house  in  order 
or  go  out  of  business,  the  fact  remained  that 
his  business  as  well  as  the  business  of  many 
others  was  far  from  being  benefited  by  a 
competition  that  could  lay  absolutely  no 
claim  to  intelligence. 

It  is  not  the  purpose  of  this  chapter  to  go 
into  a  detailed  discussion  regarding  the 


78  MAXIMUM     PRODUCTION" 

rights  and  privileges  of  a  manufacturer,  and 
while  it  is  a  fact  that  he  may  conduct  his 
business  in  any  old  way  that  he  may  elect, 
there  being  no  law  against  his  so  doing,  there 
should  be  some  means  to  prevent  him  from 
involving  others  in  the  harm  that  he  is  bring- 
ing upon  himself.  Should  a  bank  get  into 
financial  difficulties,  measures  are  promptly 
taken,  not  only  to  look  after  its  affairs,  but 
to  prevent  other  banks  from  becoming  in- 
volved; but  what  protection  has  a  manufac- 
turer from  those  whose  l '  penny- wise,  pound- 
foolish'  policies  cannot  fail  to  have  a  detri- 
mental effect  upon  the  whole  business  struc- 
ture! 

The  point  I  desire  to  emphasize  is  simply 
this — do  not  stand  in  your  own  way.  Con- 
duct your  business  in  the  best  and  most  care- 
ful manner — do  not  let  a  dollar  creep  into 
the  expense  account  that  should  be  to  your 
credit  in  the  bank — make  your  competition 
what  it  should  be ;  and  while  it  has  been  said : 
"a  man  always  believes  more  readily  that 
which  he  prefers  to  believe/  a  manufac- 
turer, in  the  majority  of  instances,  will  be 
more  successful  if  he  will  simply  ask  him- 
self the  question:  "How  do  I  know  that  I 
am  not  getting  maximum  results  1"  In  his 


PROCESSING,   ASSEMBLY,   AND    ERECTION  79 

attempt  to  answer  this  self-imposed  ques- 
tion, he  will  invariably  begin  to  feel  that 
after  all  a  man  is  in  no  position  to  determine 
the  merits  or  criticize  the  value  of  something 
about  which  he  knows  nothing,  and  will  put 
aside  partiality  for  his  own  and  prejudice 
against  other  methods  in  order  to  be  in  a 
position  to  judge  intelligently. 

Business  is  conducted  for  profit  and  must 
of  necessity  be  conducted  at  a  profit  in  order 
to  make  it  impossible  for  the  "receiver7  to 
take  over  the  management  of  affairs.  The 
margin  of  profit  can  be  so  small  as  to  be 
easily  wiped  out  through  lax  and  careless 
methods,  while  it  can  never  be  so  great  as  to 
make  it  impossible  for  the  best  of  manage- 
ment to  increase  it  to  a  slight  degree.  The 
margin  of  profit,  however,  depends  upon  the 
manufacturer  himself,  although  he  cannot  ac- 
complish what  he  desires  (and  all  desire  a 
maximum  profit)  without  depending  upon 
something  that  will  enable  him  to  obtain  the 
greatest  degree  of  efficiency  from  his  work- 
men and  machinery.  This  something  we  will 
call  "scientific  organization/  for  it  will  be 
found  in  the  efficient  industrial  plants,  where 
a  maximum  production  is  obtained  at  a  mini- 
mum cost,  that  the  details  regarding  organ- 


80  MAXIMUM     PRODUCTION 

ization  have  received  careful  consideration 
from  able  and  high-priced  men,  and  that  in- 
telligent supervision  occupies  a  most  impor- 
tant place  as  a  result  producer. 

In  analyzing  the  seemingly  complex  indus- 
trial body,  the  purpose  of  which  is  an  output, 
the  measure  of  success  its  per  cent  of  profit 
on  cost,  we  find  production  dependent  upon 
two  fundamentals: 

-^  ,  .        (  Labor 

Production  J  ,  T        .  , 

Material 


Looking  still  further,  we  find  them  subdi- 
vided as  follows  : 

iv/r        •  i       i  Raw 
Material          ^.   .  ,     , 
(  .t  mished. 

T    T  (  Productive 

Labor  -j  ._  _     ,. 

(  Non-Productive. 

We  can  therefore  define  our  production  as 
being  the  outcome  of  a  process  of  evolution 
of  materials  from  their  raw  or  unfinished 
state  to  finished  units,  through  the  instru- 
mentality of  labor  which  devotes  its  entire 
time  to  the  producing  —  productive  labor- 
assisted  by  labor  which,  while  producing 
nothing,  is  necessary  in  order  that  the  prod- 
uct may  be  processed  and  marketed  most  eco- 
nomically- -non-productive  labor. 


PROCESSING,   ASSEMBLY,  AND   ERECTION  81 

We  find  these  units,  whether  they  be  re- 
frigeration, saw-mill,  electrical,  planing- 
mill,  power,  starch-making,  hoisting,  mining 
or  other  kind  of  machines,  divided  as  fol- 
lows. 

Standard  (  Standard  and  sPecial  Parts  )  Various 

Units  ( All  Standard  Parts  )  Operations 

Special  { Standard  and  Special  Parts  )  Various 

Units  ( All  Special  Varts  )  Operations 

Before  we  can  bridge  between  the  opera- 
tion and  the  completed  unit,  the  largest  pro- 
portion of  all  work  must  go  through  two 
stages  of  development : 

Machining  or  processing. 
Assembly  or  erection. 

V 

In  a  small  establishment,  this  machining 
may  be  done  in  one  department,  or,  depend- 
ing upon  the  size  of  the  business,  we  may 
have  a  department  for  the  lathes,  one  for 
the  planers,  the  milling,  slotting,  etc.,  may 
be  done  by  another,  the  drills  may  be  in  one 
place  by  themselves,  while  the  laying  out  of 
work  from  drawings  may  be  done  by  one  de- 
partment, or  each  department  may  look  after 
its  own  laying  out. 

We  have  the  complete  unit  which  is  the 
outcome  of  an  assembling  process,  a  number 


82  MAXIMUM     PRODUCTION 

of  parts  being  required  which  have  to  pass 
through  certain  processes  of  machining,  or 
opera.tions,  before  being  in  the  proper  state 
for  assembly  with  one  another.  It  is  there- 
fore evident  that  the  more  the  parts  that  go 
through  the  various  operations  of  machining 
in  a  given  time,  the  greater  the  number  of 
completed  parts  ready  for  final  assembly. 
Now  if  we  can  picture  a  shop  containing  two 
workmen — one  to  do  the  machining  and  an- 
other to  do  the  assembling — with  a  man  in 
charge,  and  follow  two  parts,  say  a  forging 
and  a  casting,  from  the  forge  and  stock  room 
to  the  car,  we  shall  have  an  example  of  a 
supervision  of  the  highest  order ;  for  it  would 
be  an  easy  matter  for  the  man  in  charge  to 
follow  the  parts,  from  their  receipt  as  raw 
material,  through  the  stock  room  and  black- 
smith shop,  the  layout  floor,  the  drills,  lathes, 
etc.,  thence  to  the  assembly  floor,  through 
the  processes  of  erection,  to  the  car,  keeping 
in  touch  with  the  situation  until  the  parts 
reached  their  destination,  with  the  result  that 
they  could  be  produced  at  a  minimum  cost  as 
supervision  would  force  them  through  in  the 
shortest  possible  time.  If  we  could  transfer 
this  same  degree  of  efficiency  to  a  large 
manufacturing  establishment,  making  it  a 


PROCESSING,    ASSEMBLY,   AND    ERECTION  83 

part  of  a  carefully  worked  out  organization, 
it  would  not  take  long  before  a  maximum 
production  would  be  the  result. 

If  we  know  something  we  can  apply  this 
knowledge,  as  the  architect,  through  his 
knowledge  of  building  materials,  strengths, 
etc.,  can  design  a  sky-scraper.  If  therefore 
we  know  all  that  it  is  possible  to  know  con- 
cerning the  various  details  connected  with  a 
manufacturing  enterprise,  we  are  in  a  posi- 
tion to  apply  this  knowledge  successfully  and 
with  the  expectation  of  obtaining  maximum 
results,  providing  the  application  is  a  dili- 
gent one ;  for  the  success  of  any  undertaking 
is  in  proportion  to  the  care  with  which  the 
many  details  are  looked  after.  First  knowl- 
edge, then  diligence — organization,  then  su- 
pervision. 

In  the  handling  of  any  work  from  raw  ma- 
terial to  finished  product,  the  most  impor- 
tant things  we  must  know  are : 

The  various  parts  that  go  to  make  up  a 
completed  unit. 

The  operations  required  to  make  a  part 
complete. 

The  time  each  operator  should  take. 

The  tools,  jigs,  etc.,  necessary  to  complete 
an  operation. 


MAXIMUM     PRODUCTION 


The  condition  of  the  stock  of  materials 
necessary  to  complete  a  unit. 

When  the  unit  is  wanted. 

Where  the  parts  are  during  process  of 
construction. 

How  the  work  as  a  whole  is  progressing. 


LIST  OF  MATERIAL 


DESCRIPTION 
One  D.  D.  Machine, 
X  Style 

WANTED   April  1st. 


Jentelns  Manufacturing  Company 


ADDRESS      Buffalo.  N.  Y. 


MADE  UP  BY      F  L  Smith  DATE    Jany  I  1 907 

PRODUCTION  ORDER  *      420     SHEET  *       1 


SPECIAL  INFORMATION 

Regular  testing  Instructions  apply  to  this  order 


PIECE 
NL'MBEB 


Ml' U  HER 


FRO.OBDIR 
NUMBER 


X  420 
X  428 
X429 
B50 
A  214 


Arm  Brackets 
Long  Arms 
Short  Arms 
Bed 
Rods 


2160 
2140 

3100 

2000 


C.I 

Forge 

C.  I. 

Steel 


420.  I 
420.  2 
420.  3 
420.4 
420.  5 


The  Eng.tlagnttnt 

FIG.  5.     LIST  OF  MATERIAL.     (See  Page  87.) 


PROCESSING,   ASSEMBLY,   AND    ERECTION  85 

In  addition  to  possessing  a  knowledge  con- 
cerning the  above  points,  we  must  have  a 
means  of  notifying: 

Works  Manager,  of  orders  for  completed 
units. 

Foremen,  of  orders  for  production  and  as- 
sembly of  parts. 

Workmen,  of  the  work  to  be  done. 

Stock  Clerk,  of  material  to  be  delivered 
and  to  whom. 

Office,  where  parts  in  course  of  construc- 
tion are. 

Works  Manager,  regarding  condition  of 
any  order. 

Foremen,  regarding  parts  needing  special 
or  immediate  attention. 

Further,  we  must  inform: 

Shipping  Clerk,  regarding  promise  of  ship- 
ments. 

Office,  when  stock  needs  replenishment  or 
to  replace  spoiled  or  rejected  work. 

Foreman,  regarding  the  time  spent  on 
work. 

As  stated  in  the  previous  chapter,  any  in- 
troduction of  methods  must  be  made  only  af- 
ter a  careful  study  of  the  conditions.  A  man- 
ufacturer can  no  more  expect  to  get  re- 
sults from  a  system  devised  to  meet  con- 


86 


MAXIMUM     PRODUCTION 


MATERIALS 


LABOR 


TOTAL 
COST 


ditions  other  than 
his  own,  than  a  doc- 
tor can  cure  con- 
sumption by  prescrib- 
ing cough  medicine  or 
a  nerve  tonic.  A  num- 
ber of  plants  manu- 
facturing the  same 
article  will  have  con- 
ditions existing  in 
each  that  are  differ- 
ent from  those  in  all 
of  the  others ;  and 
while  principles  may 
be  the  same  in  every 
instance,  application 
must  take  into  con- 
sideration the  pecu- 
liarities and  needs  of 
each  case. 

Units  are  composed  of  parts — parts  take 
operations — operations  as  a  rule  require 
small  tools,  jigs,  etc.,  and  in  order  to  facili- 
tate processing  from  raw  materials  to  fin- 
ished product,  detailed  information  concern- 
ing them  is  important  as  well  as  complete 
knowledge  concerning  condition  of  materials. 


FIG.    6.       COST    DATA    SLIP. 


PROCESSING,    ASSEMBLY,,   AND    ERECTION  87 

Eegarding  the  various  parts  that  go  to 
make  a  completed  unit,  it  must  be  known  how 
many  of  each  are  wanted,  their  names,  the 
number  of  the  pattern  and  the  drawing  num- 
ber, the  kind  of  material,  and  the  order  num- 
ber of  each  part.  For  this  purpose  a  "list  of 
material,"  patterned  after  Figure  5  could  be 
used  to  advantage;  it  should  contain  every 
item  that  enters  into  the  construction  of  the 
completed  unit,  for  the  information  of  not 
only  the  office  but  the  shops,  and  for  future 
reference  in  case  of  repairs,  etc.  A  check 
column  has  been  provided  for,  the  purpose 
of  which  will  be  explained  later.  To  the  right 
of  the  list  and  slightly  separated  from  it  is 
a  form  with  five  columns  to  be  used  for  re- 
cording cost  data  pertaining  to  the  various 
parts.  The  lists  for  the  drawing  room  and 
the  various  shop  departments  are  printed  as 
shown  in  Figure  5,  while  the  list  to  be  used 
by  the  office  and  cost  departments  has  the 
added  slip  shown  in  Figure  6  with  the  extra 
columns  joined  to  the  main  sheet  so  as  to 
make  a  complete  list.  In  inserting  the  sheets 
into  the  typewriter — and  they  should  be  type- 
written— the  one  for  the  office  can  be  placed 
on  the  bottom  with  the  extra  part  turned 
under.  If  the  typewriter  has  a  wide  car- 


88 


MAXIMUM     PRODUCTION 


riage,  however,  the  sheet  or  slip  for  the  cost 
department  may  be  inserted  as  shown.  For 
standard  machines,  it  would  be  well  to  have 
the  lists  printed  so  as  to  save  the  work  of 
typewriting. 


PART  CARD 

Name  of  part      Bracket                                                        Number  of  part      x  i3 

Number  of  Drawing           21U)                                                   Material           C.I. 

For  what  used      H5G  Machines                                                                        Weight          ?.;o 

Tools  and  jigs  *S  and  *W 

OPERATIONS 

1 

Layout 

* 

Drill 

i 

PlaM 

U 

Bore 

Tttt  Eng  Xagatlne 

FIG.  7.   DETAILED  RECORD  OF  PARTS  AND  OPERATIONS. 

It  is  also  necessary  to  have  a  detailed  rec- 
ord of  the  parts  and  operations,  Figure  7, 
which  should  show  the  name  of  the  part,  its 
pattern  number,  its  drawing  number,  mate- 
rial, for  what  machine  or  machines  used,  its 
weight,  the  dies  and  jigs  it  takes,  and  the 
number  and  name  of  the  operations,  as  well 
as  the  time  each  operation  should  take.  A 
complete  record  of  parts  is  of  value  to  any 


PROCESSING,    ASSEMBLY,   AND    ERECTION  89 

manufacturer  in  addition  to  his  pattern  rec- 
ord, for  while  the  pattern  record  cards  would 
be  filed  by  consecutive  numbers,  the  part 
cards  would  be  filed  numerically  by  machines, 
thus  giving  a  cross  reference. 

In  order  to  facilitate  the  work  in  the  shops, 
a  means  should  be  provided  for  recording  the 
tools,  jigs,  etc.,  necessary  for  part  operations. 
A  place  should  be  provided  for  these  rigs  and 
they  should  be  kept  in  their  places  when  not 
in  use  in  the  shops.  Many  an  hour  has  been 
lost  by  a  man  looking  for  a  certain  jig  with 
which  to  complete  an  order  or  operation ;  but 
by  properly  classifying  them  as  shown  in 
Figure  8,  it  will  be  known  what  they  are  for 


TOOLS  AND  JIGS 

Number        40 

Name  and  description 

Clamping  Rig 

When  made      '12/05 

For  part          X  43 

Operation     Bore 

For  job       *?M0 

Material           C.I. 

Weight      2-5* 

Where  stored          She  If  *30 

In  use        I'es 

Remarks 

The  Eng.  Magazine 

FIG.    8.      CLASSIFICATION    OF    TOOLS    AND    JIGS. 

and  where  they  can  be  found,  this  knowledge 
going  a  long  way  toward  saving  considerable 
time  in  the  course  of  a  year.  - 

After  we  have  arranged  for  the  proper 


90  MAXIMUM     PRODUCTION 

handling  and  classification  of  details  relat- 
ing to  units,  parts,  operations  and  tools,  the 
next  consideration  of  importance  is  a  knowl- 
edge concerning  the  materials  on  hand.  It 
seems  strange  that  this  department  of  a 
business  should  be  as  carelessly  handled  as 
it  so  often  is,  for  it  is  a  fact  that  will  admit  ' 
of  no  argument  that  there  are  many  manu- 
facturers who,  while  they  may  have  machine 
departments  systematized  to  a  high  degree, 
have  stock  departments  that  are  most  sloven- 
ly managed.  It  will  be  found  in  such  cases 
that  stocks  are  arranged  in  anything  but  a 
logical  order,  a  dozen  pieces  of  the  same 
part  likely  to  be  found  in  as  many  places — 
no  one  can  tell  whether  a  part  is  in  stock  or 
not  without  searching  for  it — the  quantity  of 
a  certain  kind  of  stock  on  hand  can  only  be 
ascertained  by  counting  each  time — guess 
work  is  the  only  means  of  determining  the 
amount  used  in  a  given  time — work  is  often 
held  up  because  it  was  thought  that  the  neces- 
sary stock  was  on  hand — anyone  can  take 
what  is  wanted  without  an  order  or  even 
recording  the  withdrawal — there  is  no  check 
against  tying  money  up  in  excess  stock,  and 
absolutely  no  protection  against  theft,  waste, 
or  mislaying  of  materials. 


PROCESSING,    ASSEMBLY,   AND    ERECTION  !»l 

It  would  be  hard,  in  fact,  an  impossible 
task,  to  explain  why  a  manufacturer  will  use 
the  care  he  does  in  looking  after  his  cash  on 
hand  and  in  bank,  only  to  show  an  almost 
utter  lack  of  concern  when  money  is  trans- 
ferred into  material.  He  would  almost  have 
heart  failure  if  anyone  would  ask  him  for 
a  dollar  with  the  stipulation  that  no  entry  was 
to  be  made  on  the  books,  and  he  would  not 
consider  such  a  thing  for  a  moment.  On  the 
other  hand,  so  careful  is  he,  that  if  only  a 
quarter's  worth  of  stamps  are  purchased,  he 
sees  to  it  that  cash  is  credited  and  expense 
charged  for  the  outlay.  If  he  buys  $100 
worth  of  material,  merchandise  or  whatever 
the  account  may  be  named  is  is  charged,  and 
the  person  from  whom  the  material  was  pur- 
chased is  credited;  but  how  this  material  is 
used,  when  it  is  used,  or  where,  receives  but 
little  of  his  consideration.  If  a  dollar  in 
the  office  is  guarded  with  the  care  that  it  is,  a 
piece  of  brass  in  the  stock  room,  costing  and 
worth  a  dollar,  should  receive  the  same  de- 
gree of  attention ;  and  a  workman  should 
have  no  more  right  to  take  this  piece  of  brass 
from  stock  without  accounting  for  it  than  he 
would  have  the  right  to  walk  into  the  office 
and  remove  a  dollar  from  the  cash  drawer. 


]  RECORD  OF  FINISHED  PARTS  IN  STOCK 

MIN.  TO  BE  CARRIED  5  1 

MAX.  TO  BE  CARRIED  is 

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PROCESSING,   ASSEMBLY,   AND    ERECTION  93 

Material  is  a  heavy  item  to  the  majority 
of  manufacturers,  and  it  is  of  the  utmost  im- 
portance that  no  more  material  be  carried 
than  the  requirements  of  the  business  call 
for;  it  is  an  easy  matter  to  lose  the  earning 
power  of  considerable  money  by  placing  it  in 
stock  that  is  not  needed.  It  should  be  the 
duty  of  a  competent  person,  familiar  with 
the  details  of  the  business,  to  establish  a 
maximum  and  minimum  allowance  covering 
every  kind  of  material  used,  for  the  guidance 
not  only  of  the  purchasing  department  but 
of  the  shops  as  well.  This  will  keep  the  ma- 
terials within  proper  limits,  which  will  mean 
a  considerable  saving  to  any  manufacturer. 
If  in  conjunction  with  this  we  know  when 
stock  is  disbursed  and  the  purpose  for  which 
it  is  used,  we  can,  if  we  know  what  is  pur- 
chased, easily  determine  balances  on  hand, 
which  can  be  checked  against  the  allowances. 

Materials  should  not  be  given  out  under 
any  circumstances  except  by  the  authority  of 
a  written  order;  and  if  the  proper  persons 
are  held  responsible,  it  will  be  found  that  the 
stock  department  will  count  for  something 
in  the  accomplishment  of  maximum  results, 
for  it  will  be  known  what  is  in  stock  and  the 
quantity;  purchases  can  be  made  to  advan- 


94  MAXIMUM     PRODUCTION 

tage ;  overstocking  will  be  prevented ;  it  will 
be  known  which  lines  are  moving  in  a  satis- 
factory way  and  which  are  not;  responsi- 
bility will  be  fixed;  workmen  will  find  it  a 
hard  matter  to  remove  material  without  au- 
thority to  do  so;  mislaid  and  wasted  ma- 
terials can  be  traced  to  those  responsible — 
and,  in  fact,  all  the  important  facts  concern- 
ing materials  will  be  known.  Figure  9  is 
shown  as  affording  a  means  for  recording  all 
data  concerning  materials  in  stock,  the  en- 
tries fully  explaining  the  method. 

Knowledge  is  power.  The  most  success- 
ful surgeon  is  he  who  has  made  the  most 
careful  study  of  the  human  body — its  bones, 
muscles,  nerves — and  the  most  successful 
manufacturer  is  he  who  has  made  the  most 
careful  study  of  the  industrial  body — its 
basic  elements,  its  anatomy,  the  analysis  of 
its  forces,  the  proper  handling  of  its  de- 
tail. It  is  naturally  this  kind  of  a  manufac- 
turer who  realizes  his  ambition — maximum 
production. 


CHAPTER  VI 

EFFICIENCY  IN  THE  USE  OF  MATERIALS 

AND  TIME 

T  TOW  much  time  are  you  paying  for  tvhich 
-*•  -1  is  producing  you  nothing?  Time  is  an 
important  element  in  production,  and  it 
naturally  follows  that  any  lost  or  wasted 
time  means  a  certain  decrease  in  the  amount 
'of  output.  The  following  illustration  will 
serve  to  show  what  lost  time  may  mean  to  a 
manufacturer.  If  we  assume  that  200  pro- 
ducers lose  or  waste  only  5  minutes  each  hour, 
we  have  166.6  lost  hours  at  the  end  of  a  10- 
hour  day,  which  in  300  days  to  the  year  would 
amount  to  49,980  hours.  Figuring  each  hour 
on  the  basis  of  20  cents  would  show  that  lost 
times,  in  labor  alone,  would  amount  to 
$9,996,  not  counting  the  fact  that  consider- 
able money  is  lost  in  the  diminished  output, 
which  would  not  be  the  case  could  these 
49,980  hours  have  been  utilized  to  advantage. 
Consider  the  number  of  machines  that 
could  be  built  in  this  lost  time  alone ! 

95 


96  MAXIMUM     PRODUCTION 

Doubtless  every  reader  of  this  chapter  can 
call  to  mind  a  plant  where  the  production 
could  be  materially  increased  if  wasted  time 
could  be  used  to  advantage — where  men  have 
to  wait  around  after  finishing  one  job  before 
receiving  another — where  the  stock  clerk  is 
obliged  to  spend  considerable  time  in  looking 
over  his  stock  before  knowing  whether  a 
certain  part  is  in  stock  or  not- -where  ma- 
chines are  often  idle  until  work  can  be  found 
for  them — where  the  assemblers  are  kept 
waiting  for  parts  being  machined  before  they 
are  able  to  complete  a  unit — where  it  is  often 
necessary  for  the  shipping  clerk  to  be  on  the 
jump  a  good  share  of  the  time  to  find  a  part 
here  and  a  piece  there  before  shipment  of  a 
machine  can  be  made — where  it  is  necessary 
for  someone  to  be  constantly  interviewing 
various  persons  in  an  endeavor  to  find  the 
status  of  an  order — where  more  than  a  rea- 
sonable amount  of  time  is  consumed  by  men 
in  taking  work  out  of  their  machines,  in 
order  to  finish  a  rush  or  forgotten  order, 
then  putting  back  the  work  they  had  taken 
out  on  the  start — where  machines  are  about 
ready  to  ship  only  to  find  that  some  part  has 
been  neglected  or  forgotten — where  it  is  nec- 
essary to  spend  considerable  time  running  to 


EFFICIENT   USE   OF    MATERIALS    AND    TOIi:          97 

the  office  and  drawing  room  for  certain  in- 
formation before  a  part  can  be  machined  or  a 
unit  assembled- -where  work  is  made  without 
regard  to  any  predetermined  standard.  Add 
to  these  the  harmful  effects  of  friction  be- 
tween those  in  authority,  the  turmoil,  con- 
fusion, etc.,  and  we  have  a  condition  of  af- 
fairs for  which  there  is  no  excuse  and  which 
is  responsible,  to  a  large  degree,  for  lack 
of  maximum  results.  Efficiency  in  produc- 
tion can  be  brought  about  only  after  we 

«/ 

have  either  eliminated  these  conditions  alto- 
gether or  reduced  the  wasted  time  to  a  mini- 
mum. I  will  admit  that  it  is  impossible  to 
have  everything  go  right  all  of  the  time,  but 
everything  can  be  so  handled  as  to  make 
things  go  right  most  of  the  time. 

The  second  chapter  dwelt  at  some  length 
on  the  necessity  for  a  carefully  worked  out 
organization  that  the  various  forces  might 
be  harmoniously  united;  the  fifth  briefly 
analyzed  the  industrial  body,  providing  a 
means  for  taking  care  of  the  information  nec- 
essary to  facilitate  production.  In  this  we 
will  go  a  step  further  and  outline  such  meth- 
ods as  have  for  their  ultimate  purpose  the 
handling  of  the  greatest  amount  of  work  in 
the  shortest  space  of  time  consistent  with 


98  MAXIMUM     PRODUCTION 

good  workmanship.  In  order  to  do  so,  we 
will  assume  that  a  business  has  been  organ- 
ized to  manufacture  certain  machines,  all 
raw  materials  to  be  purchased  outside,  labor 
being  paid  by  the  day,  the  shop  manufactur- 
ing departments  being : — 

Assembly  Department. 

Lathe  and  Planer  Department.   M 

Milling  Department. 

-P.  .1V      -p.  [Department. 

Drilling  Department. 

Forging  Department. 

The  connecting  link  between  the  factory  or 
engineering  branch  of  the  business  and  those 
who  consume  its  output  is  the  office  or  com- 
mercial branch;  much  therefore  depends 
upon  how  it  is  managed,  and  too  much  im- 
portance cannot  be  attached  to  the  necessity 
of  having  some  definite  understanding,  on 
the  start,  as  regards  the  way  details  shall  be 
handled ;  otherwise  costly  blunders  are  bound 
to  occur.  To  illustrate.  If  orders  are  given 
by  more  than  one  person,  or  if  they  can  be 
given  by  more  than  one  department,  it  is 
only  natural  to  expect  that  some  orders  will 
be  entered  twice,  or  some  not  at  all,  each  per- 
son or  department  thinking  that  the  matter 


EFFICIENT    USE   OF    MATERIALS    AXD   TOI  K 

has  been  looked  after  by  the  other.  Delegate 
certain  lines  of  work  to  those  most  compe- 
tent, make  the  supervision  such  as  will  take 
care  of  the  detail  properly,  and  it  will  be 
found  that  there  will  be  less  confusion  and 
mistakes. 


1  2  3  4  6  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  26  26  27  28  •  30  31 

OFFICE    COPY 


Buffalo.  N.  Y..      Jun«  23  1 907. 

Sold  To        William  Jenkins  and  Company  Date  Sold          June  21  1907 

Address  Utica.  New  York  Sold  By        Johnson 

Destination  ..  ,,  Our  Order  f     3445 

Ship  Via  Fast  freight  Their  Order#    A  25589 


One  cylinder  head  ^  X  442  344! 

One  cylinder  B  20  2811 

One  piston  X  440  344  i 

This  is  a  rush  order. 


FIG.  10.       INITIAL  RECORD  OF  ORDER.       MADE  IN  QUADRUPLICATE. 

All  orders  and  letters  pertaining  to  orders 
should  therefore  be  sent  to  the  order  depart- 
ment before  anything  else  is  done  with  them. 
This  is  our  starting  point ;  and  that  the  office 
may  have  a  record  of  each  order,  that  the 
works  manager  may  know  what  the  shop  is 
expected  to  build,  that  the  shipping  and 


100  MAXIMUM     PRODUCTION 

stock  departments  may  also  have  this  infor- 
mation, and  that  the  customer  may  be  ad- 
vised that  the  order  has  been  received  and 
entered,  four  copies  of  the  order  should  be 
made,  Figure  10  being1  the  office  record,  the 
one  sent  to  the  customer  bearing  the  regula- 
tion acknowledgment  advice  and  the  possible 
date  of  shipment. 

The  drawing  room,  having  been  made  re- 
sponsible for  the  accuracy  of  all  orders  en- 
tered, should  state  what  is  necessary  to  fur- 
nish, giving  the  commercial  as  well  as  the 
shop  classifications.  In  order  to  do  this,  they 
naturally  need  the  original  order  to  know 
what  the  customer  really  ordered;  but  the 
order  department,  in  turn,  must  have  some 
means  of  knowing  where  the  order  is  before 
it  is  entered  and  finally  filed  away.  The 
order  department  therefore  takes  the  four 
copies  above  mentioned,  fills  in  the  headings 
only,  and  sends  the  office  copy,  with  the  origi- 
nal order  from  the  customer,  to  the  drawing 
room,  leaving  the  three  remaining  copies  of 
the  order  on  the  desk  of  the  chief  order  clerk, 
which  will  show,  at  all  times,  the  orders  re- 
ceived but  not  as  yet  entered.  The  drawing 
room  takes  the  order,  looks  up  the  necessary 
information,  makes  a  "list  of  material,"  as 


EFFICIENT    USE   OF   MATERIALS   AND   TIME       101 

described  in  the  fifth  chapter,  if  the  order 
calls  for  a  number  of  parts  or  if  for  a  ma- 
chine, but  if  the  parts  necessary  be  few,  the 
information  is  simply  recorded  on  the  origi- 
nal order  and  returned  with  the  office  copy  to 
the  order  department.  The  four  copies  of 
the  order  are  then  taken,  the  information 
filled  in  the  body  of  the  order,  the  possible 
date  of  shipment  ascertained  (the  clip  show- 
ing the  date  is  indicated  on  Figure  10)  the 
acknowledgment  is  mailed  to  the  customer, 
the  works  manager's  and  shipping  clerk's 
copies  are  sent  to  the  proper  persons,  while 
the  office  copy  is  filed  alphabetically  in  the 
order  department,  in  a  place  which  we  can 
call  the  "live-order'  file.  In  connection  it 
might  be  said  that  the  possible  date  of  ship- 
ment should  not  be  decided  upon  until  after 
the  matter  has  received  the  attention  of 
those  competent  to  know  regarding  the  time 
the  materials  can  be  shipped.  This  is  of  the 
utmost  importance,  and  the  proper  handling 
of  shipments  will  be  the  subject  of  the  next 
chapter. 

As  the  orders  are  being  made,  a  number  of 
copies  of  the  "list  of  material'  should  be 
typewritten — one  for  the  works  manager,  one 
for  the  assembly  department,  one  for  the 


102  MAXIMUM     PRODUCTION 

foreman  in  charge  of  the  machining  depart- 
ment, one  for  the  benefit  of  the  stock  and 
shipping  clerks,  one  for  the  order  depart- 
ment— to  be  used  by  the  cost  department  in 
entering  cost  data  during  process  of  con- 
struction and  finally  filed  away  by  this  de- 
partment— the  original  from  which  the  copies 
were  made  being  filed  in  the  drawing  room  as 
their  record. 

So  far  we  have  given  notification  regard- 
ing work  to  be  made  as  well  as  the  necessary 
information  to  complete  the  work,  but  no  di- 
rect authority  has  been  given  to  process  or 
assemble,  which  cannot  be  done  until  it  is 
known  in  what  condition  the  stock  of  mate- 
rials is  in.  What  must  be  known  is : 

l--What  is  in  stock  finished  ready  for  as- 
sembly 

2-  -What  is  in  stock  in  the  rough. 

3 — What  must  be  ordered  which  when  re- 
ceived will  be  ready  for  assembly. 

4 — What  must  be  ordered  which  when  re- 
ceived will  have  to  be  processed. 

The  stock  clerk  therefore  takes  the  office 
list  which  accompanies  his  list,  checks 
through  his  stock,  and  in  the  check  columns 
uses  the  following  symbols  to  designate  the 
condition  the  order  is  in: 


EFFICIENT    USE    OF   MATERIALS   AXD    TniK       103 


w-  Covering  parts  under  classification  1. 
v  -  Covering  parts  under  classification  2. 
©-  Covering  parts  under  classification  3. 
©~  Covering  parts  under  classification  4. 


6 


PURCHASE  REQUISITOIN 


NO. 


f 

s 


NO. 


6  -/<?- 


DESCRIPTION 


PURPOSE:- 
Name 


S.O.Number 


Shipto 


•J&Cy  crcAty 


Addresw 


now  to  Sh,p 


Signed  by 


When  Wanted 


Approved  by 


FIG.    11.       REQUISITION   FOR  MATERIAL.       (866  page   105.) 


104 


MAXIMUM     PRODUCTION 


PRODUCTION  ORDER 

FINISHED 

ROUGH 

1'RODICTION  ORDER  No.             PIECE  No.             DRAWING  No                    MATERIAL 
1160.57                             X  450                 3345                                     Steel 

TO  BE  COMPLETED 

DATE  OFORDER.               FOR  ASSEMBLY  ORDER  No 

5-10-7                                                       1160           Abbott 

COMPLETED 

6-/A-6 

QUANTITY 

DESCRIPTION 

50 

Guide  Heads 

NOTE   Exccutp  this  order,  returning  same  to  factory  office  upon  complption  of  the  work. 
Charsre  all  labor  and  material  to  the  above  Production  Order  Number. 
WhPn  this  Production  Order  covers  the  assembly  of  a  machine,  charcre  "labor"  only  to  the 

/2^               POPS-MAM 

The  Eng  Magazine 


FIG.  12.   PRODUCTION  ORDER;  FACE. 


Assembly' 

'Boring 

Turning 

Forging 

Milling 

Planmg 

DrillinK 

"      Man 
Dl«  No. 

Un. 

Ami 

P 

N.. 

No 

Un. 

Ant. 

line 

No" 

Hr9. 

Ami. 

D.« 

M«n 

En 

Amt 

One 

Man 
No. 

Un 

Amt 

Wt« 

'i" 

I<0. 

Hrl 

Ami. 

^ 

Mao 

No. 

Bra. 

\ni 

Threading 

Grinding 

Babbitting 

Laying  Out 

Cutting  Off 

P 

Miio 

No. 

Bn. 

Amt 

[Hie 

MHO 
No. 

Ur>. 

Amt 

jute 

M  a.) 
No. 

Drs. 

Atnt 

Dtte 

Man 
No. 

Bn. 

Ami 

ii.tf 

M.H 
No. 

Un 

Amt. 

D«u 

tlan 
No. 

Hrs. 

Aon 

>>ta 

M»n 
No. 

Bn 

Ami 

The  Eng.Mayatdu 

FIG.  12.   PRODUCTION  ORDER;  BACK. 

The  office  list  is  then  returned  to  the  order 
department  along  with  requisitions  for  mate- 


EFFICIENT    USE   OF   MATERIALS    AND    TOII-        105 

rial  needed,  Figure  11,  and  here  the  informa- 
tion concerning  the  condition  of  the  stock 
is  transferred  to  the  list  for  the  assembly  de- 

a 

partment,  the  requisitions  being  turned  over 
to  the  purchasing  department  where  the  nec- 
essary material  is  ordered. 

The  order  department  then  takes  Figure 
12  and  makes  an  order  in  duplicate  for  the 
assembly  department  to  cover  the  assembly 
work,  sending  the  original  to  the  foreman, 
duplicates  being  filed  in  the  office,  after 
which  orders  are  made  for  all  parts  marked 
as  in  stock  in  the  rough,  or  as  needing  to  be 
processed  upon  receipt,  sending  the  originals 
of  the  former  class  to  the  foreman  of  the 
machining  department,  the  duplicates  being 
filed  in  the  office;  on  the  reverse  side  are 
posted  the  cost  data  secured  from  the  daily 
reports  turned  in  by  the  workmen,  these  dup- 
licates being  filed  either  by  consecutive  num- 
bers of  orders  or  by  part  symbols  as  best 
suits  the  conditions,  for  we  have  the  "list  of 
material' '  showing  the  order  number  and  the 
name  of  the  customer  or  the  purpose  for 
which  the  work  is  being  done,  and  we  have 
the  official  notification,  Figure  10,  which  is 
filed  alphabetically,  so  that  any  reference  or 
cross  reference  is  facilitated.  The  original 


106 


MAXIMUM     PRODUCTION 


and  duplicate  orders  covering  the  material 
which  must  be  ordered  and  processed  upon 
receipt  are  held  in  the  order  department,  in 
a  place  by  themselves,  pending  the  receipt  of 
the  materials,  so  that  the  machining  depart- 
ment receives  orders  to  process  only  such 


WORKMAN'S  ORDER  TICKET. 


PRODUCTION  ORDER  NO. 


PIECE  NO. 
6 


DRAWING  NO. 


MATERIAL 

c/. 


DATE  OP  ORDER 


FOR  ASSEMBLY  ORDER  NO. 


MATERIAL  TO  GO  TQJ  ^£H^£|NO.__3/._  NO__^J!___NO_ HJ. NO_. 


o- 


loo 


WHEN  MACHINE  WORK  IS  FINISHED.  DELIVER  TO 


VpOWs 


The  SngJtagattnt 

FIG.  13.     WORKMAN'S  ORDER  TICKET.     MADE  IN  TAG  FORM 
FOR  ATTACHMENT  TO  WORK. 

parts  as  are  in  stock.  This  file  we  will  call 
the  "reserve-order'  file.  Figure  13  is  made 
out  at  the  same  time  as  Figure  12,  and  being 
sent  to  the  stock  clerk  for  attaching  to  the 
parts  when  they  are  issued  will  show  the 
workmen  what  is  wanted;  in  no  case  should 
these  tags  be  removed  until  the  work  is  safely 
on  the  assembly  floor,  after  processing. 
As  yet,  however,  no  material  has  moved, 


EFFICIENT   USE   OF   MATERIALS   AXD   TIME       107 

although  we  have  provided  for  handling  it 
as  fast  as  it  may  be  issued.  In  the  first 
place,  the  assembly  department  knows  from 
the  list  what  parts  are  necessary  to  complete 
the  order;  it  is  also  known  from  the  check- 
ing what  parts  are  available  as  finished  stock 
for  immediate  assembly  and  what  parts  must 
be  machined  before  they  can  be  assembled. 
The  assembly  foreman  knows,  if  he  is  fa- 
miliar with  the  product,  in  order  that  assem- 
bly may  be  facilitated : 

The  finished  parts  needed  first. 

The  rough  parts  that  need  machining  first. 

In  order  to  start  the  work,  and  that  his 
department  may  operate  to  the  best  of  ad- 
vantage, he  fills  out  the  form  shown  in 
Figure  14,  for  the  important  finished  parts 
he  needs  in  order  to  begin  the  assembly,  mak- 
ing other  lists  as  fast  as  he  needs  other  fin- 
ished materials,  these  lists  being  sent  to  the 
stock  room.  To  get  the  parts  needing  ma- 
chining, he  uses  the  form  shown  in  Figure  15, 
sending  to  the  machining  department  the 
slips  covering  those  parts  he  is  most  in  need 
of,  the  balance  being  sent  to  the  stock  room. 
It  is  therefore  evident  that  the  stock  and  ma- 
chining departments  know  what  the  assembly 
department  is  most  in  need  of  at  all  times  and 


108 


MAXIMUM     PRODUCTION 


FINISHED  PARTS 

Deliver  U 

> 

floor  .for  i 
rhich  are  n 

Assembly  Order  #          the 

following  finished 
once. 

parts  v 

eeded  by  my  department  at 

# 

Piece 

Drawing 

Mat'l 

Name 

Order 

Date  Del. 

• 

Date                 Foreman                                       Date                       Stock  Clerk 

The  Eng.Magaxttu 

FIG.     14.        ASSEMBLY     DEPARTMENT'S     ORDER     FOR     FINISHED 

PARTS. 


can  be  governed  accordingly,  and  while  the 
stock  clerk  is  delivering  the  finished  parts 
called  for,  the  machining  department  is  mak- 
ing out  requisitions  for  the  rough  parts, 
using  Form  12  as  the  authority  for  so  doing 


&5 


taking  into  consideration  the   requirements 
of  the  assembly  department  as  evidenced  by 


EI-TICIKXT   USE   OF   MATERIALS   AND   TIME       109 

their  requisitions  for  finished  parts.  The 
stock  clerk  also  sees  to  it  that  the  requisi- 
tions from  the  machining  department  marked 
with  the  cross  in  the  circle,  which  cover  the 
parts  wanted  first  by  the  assembly  depart- 
ment, are  promptly  attended  to. 


MATERIAL  CARD. 

PRODUCTION  ORDER  NO. 
125.^3 

PIECE  NO.                DRAWIh 
X  4320                            2640 

JG  NO.                 MATERIAL 
Steel 

DATE  OF  ORDER 
5-30-6 

FOR  ASSEMBLY  ORDER  NO 
125-  McKlnney 

DELIVER  MATERIAL  TO  • 

WORKMAN)  NQ     J}0 

MACHINE-  ) 

1  0  Armbrackets   to  be 

finished  standard. 

C7*^_^-u^i/L 
CtAA&YyLfr 

4/3/6 

^      /  y  /  1  /  /  f 
y     fy/t/L 

When  properly  dated  and  signed  by  Foreman,  this  card  becomes  a  Requisition  for  Material. 
It  becomes  a  Material  "Delivered"  card  when  dated  and  signed  by  the  Stockkeeper.  who. 
after  signing   will  place  weight  on  back  and  return  it  to  office. 

DATE                             p  FOREMAN                              DATE 

STOCKKEEPER 
£~^cA, 

The  KIIJ  )l  wazi/i.- 

FIG.       15.         MACHINING      DEPARTMENT'S 

SPECIALLY   NEEDED. 


ORDER      FOR      PARTS 


After  the  stock  clerk  has  delivered  the 
parts  wanted  first  by  the  machining  and  as- 
sembly departments — after  the  machining 
department  has  begun  work  on  the  parts  the 
assembly  department  is  most  in  need  of-  -the 
balance  of  the  orders  can  be  worked  in  as 
convenient;  at  any  rate,  we  have  prevented, 


110  MAXIMUM     PRODUCTION 

by  some  such  method,  giving  to  the  assembly 
and  machining  departments,  on  the  start,  ma- 
terials which  are  not  necessary  until  toward 
the  end  of  the  work  while  material  that  is 
urgently  needed  is  not  sent  in  or  processed 
until  the  assembly  department  finds  that  it 
cannot  go  any  further  until  the  parts  are  in 
hand  that  should  and  could  have  been  ready 
on  the  start.  As  fast  as  the  stock  clerk  de- 
livers material  to  the  assembly  department, 
requisitioned  by  Forms  14  and  15,  and  to  the 
machining  department  by  Form  15,  he  sends 
the  slips  to  the  order  department.  This  is 
also  done  by  the  machining  department  when 
material  covered  by  requisitions  from  the 
assembly  department  is  delivered  to  the  as- 
sembly floor. 

If  the  assembly  department  could  use  the 
output  of  the  machining  department  as  fast 
as  parts  are  finished  by  it,  the  proper  course 
would  be  to  send  all  work  to  the  former  de- 
partment; but  this  cannot  be  done  in  the 
majority  of  cases  for  the  reason  that  the 
assembly  floor  would  soon  be  so  littered  up 
as  to  make  it  almost  impossible  for  the  work- 
men to  turn  around,  and  as  we  have  a  place 
for  the  storage  of  parts  (the  stock  room)  the 
most  logical  plan  is  for  the  machining  de- 


EFFICIENT   USE   OF   MATERIALS   AND   TIME       111 

partment  to  send  all  completed  work  to  the 
stock  room  with  the  exception  of  the  few 
parts  that  are  of  importance  in  the  eyes  of 
the  assembly  department.  If  we  made  it  a 
rule  to  send  every  part  to  the  stock  room,  we 
would  perhaps  be  treated  to  the  spectacle  of 
seeing  a  trucker  take  a  piece  of  finished  work 
to  the  proper  location  in  the  stock  room, 
unload  it,  be  informed  that  the  assembly  de- 
partment wanted  it  immediately,  load  it,  and 
take  the  part  to  the  assembly  floor — consider- 
able unnecessary  work.  The  better  and  more 
efficient  way  is  as  above  outlined,  for  the 
order  department  will  know  from  the  signa- 
tures to  Form  15  whether  the  part  that  went 
to  the  assembly  department  came  from  the 
stock  clerk  or  the  machining  department; 
but  before  this  latter  department  can  deliver 
a  finished  part  it  must  know  where  to  deliver 
it,  and  no  trucker  must  take  a  part  unless 
the  ticket  attached  shows  where  it  is  to  be 
taken.  The  rule  is  simply  this :  all  parts  go 
to  the  stock  room  except  those  covered  by  the 
requisitions  from  the  assembly  department, 
so  that  it  is  an  easy  matter  for  someone  dele- 

•/ 

gated  to  look  after  this  particular  part  of 
the  work  to  check  assembly  department 
requisitions  against  the  work,  marking  at  the 


112  MAXIMUM     PRODUCTION 

bottom  of  the  workmen's  ticket  where  the 
parts  are  finally  to  go. 

It  is  the  duty  of  the  order  department  each 
day  to  check  over  the  receiving  clerk 's  list  of 
receipts,  so  that  if  any  material  has  been  re- 
ceived against  which  there  are  orders  in  the 
' '  reserve-order ' '  file,  they  can  be  released  and 
the  machinery  started  so  as  to  get  the  parts 
through  the  machining  department  and  to 
the  stock  room  or  assembly  floor.  The  stock 
clerk  has  the  requisitions  from  the  assembly 
department  covering  parts  which,  while  not 
needing  processing,  were  not  in  stock,  so  that 
as  fast  as  material  arrives,  it  will  be  issued 
by  him  without  delay. 

The  most  important  consideration  now  is : 
iclier e  are  all  the  parts  after  an  order  has 
been  started  and  under  way,  and  wliat  shape 
is  an  order  in  at  any  one  time?  Any  manu- 
facturer who  is  in  a  position  to  answer  this 
question  intelligently  is  on  the  road  to  get- 
ting everything  out  of  his  business  that  is 
possible.  Eeference  to  Form  15  will  show 
that  after  signing  by  the  foreman  and  pre- 
vious to  delivery,  it  is  a  "requisition7  for 
material;  but  as  soon  as  the  material  is  de- 
livered and  the  stock  clerk  affixes  his  signa- 
ture, the  slip  indicates  that  the  material  has 


EFFICIENT    USE   OF    MATERIALS    AND    TIME       113 

been  "delivered'  to  the  machine  or  work- 
man specified.  From  this  slip  we  know  that 
on  June  3,  Smith,  the  stock  clerk,  delivered 
ten  arm  brackets  to  workman  30 — drill  de- 
partment, as  requested  by  Jenkins  the  fore- 
man, and  as  the  order  department  receives 
this  slip  right  after  the  stock  clerk  signs  it, 
the  department  has  a  means  of  knowing  ivhen 
these  ten  parts  were  issued  as  well  as  where 
they  were  delivered.  If  we  file  this  slip 
against  the  drill  department,  we  really 
charge  it  and  credit  the  stock  room  for  the 
parts,  for  these  slips  are  used  as  authority 
for  posting  to  the  stock  cards.  When  the 
order  department  has  done  this  with  all  of 
the  "material  cards/ '  it  has  in  its  possession 
a  means  of  advising  anyone  who  wants  to 
know  just  where  any  part  is — providing  the 
part  is  followed  from  place  to  place  in  some 
way.  This  can  be  done  by  using  certain  in- 
formation and  having  in  the  order  depart- 
ment a  file  of  drawers  where  these  slips, 
Form  15,  can  be  filed. 

This  information  comes    from     different 
sources.    In  the  order  file,  we  have  the  "re- 
serve orders '    for  which  there  is  no  material 
-we  have  the  lists  of  finished  parts,  Form 
14,  which  the  stock  clerk  has  delivered  to  the 


MAXIMUM     PRODUCTION 

assembly  department,  and  we  have  the  requi- 
sition, Form  15,  which  comes  from  either  the 
stock  clerk  or  machining  department  as  the 
case  may  be.  A  form  of  receipt  is  used  to 
cover  the  materials  passing  betiveen  the  de- 
partments of  the  machining  department, 
Form  16,  these  being  sent  to  the  office  when 
one  of  these  departments  receives  material 
from  another.  The  importance  of  this  can- 
not be  overestimated  as  it  places  each  de- 
partment on  its  own  feet,  each  one  checking 
the  work  of  the  other  as  well  as  fixing  re- 
sponsibility. The  machining  department  and 
the  stock  room  require  no  receipt  from  the 
assembly  department  for  the  reason  that  the 
requisitions  for  material  are  "delivered' 
slips  after  materials  have  been  delivered,  and 
are  virtually  equivalent  to  receipts.  This  is 
our  fourth  source  of  information,  the  fifth 
and  final  one  being  a  daily  list  of  receipts 
from  the  stock  clerk  covering  finished  parts 
received  from  the  machining  department. 
This  knowledge  is  valuable  and  on  tap  so 
that  manipulation  is  the  only  thing  necessary 
to  be  able  to  furnish  information  concerning 
the  work  under  way. 

Take,  for  instance,  Form  15.  Upon  receipt 
of  this  slip  from  the  stock  room,  the  clerk, 


EFFICIENT    USE    OF    MATERIALS    AND    TIME       115 


MATERIAL  RECEIPTS 

We  have  just  receivet 

from  the       ^  ^x-<^  Department  the  list 

of 

parts  below  described 

# 

Piece 

Drawing 

Name 

Order 

/<? 

>  VJlO 

A  6  y«3- 

CfA^i^.    /^3^ACfj^> 

A25"    VJ 

J 

^?4^ 

A/  ,3^ 

(p^^ 

/<{«?  TA 

J- 

^  3*& 

/<?  F<? 

\^S    sC*^L*^eC&t4- 

/v3<?     V5 

2.0 

y  ^<? 

1o  ?0 

cUo 

y^<3-  ^ 

/ 

Date    "V^A                               By  faS^ltfrv^                           Department      >C           X^  / 

The  Eng  Magazine 


FIG.     16. 


RECEIPT     FOR     MATERIAL     PASSING     BETWEEN 
DEPARTMENTS.       (866   H6Xt  page.) 


who  knows  that  Jenkins  is  in  charge  of  the 
drill  department,   marks    in    one    corner- 


116  MAXIMUM     PRODUCTION 

"Drill,  6-3-6,'  as  shown,  and  files  in  the 
drawers  above  mentioned  back  of  the  guide 
marked  125,  the  arrangement  being  numeri- 
cal. On  the  8th,  a  receipt,  Form  16,  comes 
from  the  Lathe  and  Planer  Department,  the 
first  item  being  the  ten  arm  brackets,  order 
125.43.  The  clerk  then  removes  the  slip, 
Form  15,  from  its  numerical  place  and  marks 
"L.  and  P.,  6-8-6, ' '  placing  it  back  in  its  po- 
.sition  again.  On  the  10th,  a  list  of  receipts 
comes  to  the  order  department  which  con- 
tain this  item  of  ten  arm  brackets,  and  the 
clerk  then  marks  on  the  slip  as  is  shown  in 
the  illustration.  It  is  again  filed  where  it 
remains  until  the  assembly  department  requi- 
sition for  these  ten  parts  is  received  from 
the  stock  clerk,  dated  the  12th.  The  slip  is 
marked  to  correspond,  and  filed  with  the  as- 
sembly-department slip,  for  future  reference. 
It  is  therefore  evident  that  any  reference 
to  125.43,  ten  arm  brackets,  will  show  the 
condition  of  the  order  at  any  time  after  the 
material  was  delivered.  Applied  to  all 
orders,  it  follows  that  the  drawers,  the  "re- 
serve-order' file,  and  the  lists  sent  to  the 
office  by  the  assembly  department  through  the 
stock  clerk,  will  show  at  all  times  the  condi- 
tion of  any  order ;  the  value  of  this  cannot  be 


EFFICIENT    USE    OF   MATERIALS    AND   TIME       117 

overestimated,  and  while  a  casual  reading 
would  seem  to  indicate  that  the  method  is  too 
complex  to  be  practical,  consideration  will 
show  that  this  is  not  the  case.  It  should  need 
no  argument  to  convince  a  manufacturer 
that  material  should  not  be  delivered  anv- 

i/ 

where  without  a  record  being  made  of  the 
transaction,  either  in  the  form  of  a  receipt 
or  requisition,  and  that  the  stock  clerk  should 
make  a  list  of  all  the  materials  he  receives 
from  the  machining  department,  as  the  re- 
ceiving clerk  does  for  all  materials  received 
from  outside.  The  information  serves  a  pur- 
pose in  itself,  but  why  not  go  further  with  it? 
What  would  do  more  good  than  an  arrange- 
ment whereby  this  information  can  be  used 
to  inform  anyone  regarding  the  condition  of 
orders,  especially  when  one  considers  that  a 
few  hours  each  day  will  do  the  work,  and 
that  in  a  plant  of  any  size,  where  a  number 
of  machines  are  being  built— the  parts  num- 
bering into  the  thousands — if  regular  and 
stock  orders  are  considered,  it  is  out  of  the 
question  to  expect  any  one  man  or  group  of 
men  to  know  all  about  every  part  of  every 
order  at  all  times.  Provide  some  means  of 
informing  them  regarding  the  progress  of 
the  orders  and  the  location  of  the  parts,  and 


118  MAXIMUM     PRODUCTION 

they  are  then  in  a  position  to  take  advantage 
of  the  information  for  they  will  know  how  to 
proceed  to  a  desired  end  as  the  following  will 
show. 

If  the  works  manager  wishes  to  "get 
after' '  an  order,  he  gives  his  "list  of  mate- 
rial7 to  the  order  department,  with  instruc- 
tions to  advise  him  regarding  the  condition 
of  the  various  parts.  These  parts  are  either 
on  the  assembly  floor,  in  the  lathe  and  planer, 
drilling,  or  milling  departments,  in  the  stock 
room  as  finished  parts  received  from  the  ma- 
chining department  and  awaiting  requisitions 
from  the  assembly  department,  not  as  yet 
withdrawn  from  stock,  while  some  of  the  ma- 
terial necessary  to  finish  the  order  may  not 
have  been  received  by  the  stock  department. 
The  order  department  adopts  the  following 
symbols  as  indicating  the  condition  of  the 
parts : 

W-  -Orders  waiting  for  material. 

A — In  Assembly  Department. 

M--In  Milling  Department. 

D — In  Drilling  Department. 

L — In  Lathe  and  Planing  Department. 

F-  -Finished  parts  in  Stock  Boom  ready 
for  assembly. 

N — Parts  not  as  yet  withdrawn. 


EFFICIENT    TSK    OF    MATERIALS    AM)    TI.MK       ll!» 

The  clerk  can  turn  to  his  file  or  orders  wait- 
ing for  materials  and  place  a  letter  W  in  the 
v  column  of  the  "list  of  material'  for  pari< 
whose  numbers  correspond  to  the  numbers 
of  the  parts  on  the  list.  He  then  takes  the 
list  from  the  assembly  department,  Form  14, 
prefixes  the  letter  A  for  parts  in  the  assem- 
bly department,  after  which  he  refers  to  the 
drawers  where  the  slips,  Form  15,  are  filed, 
and  checks  each  one  covered  by  the  order 
number  in  question  against  the  list  of  ma- 
terial. After  he  has  done  this  he  will  have 
a  number  of  parts  against  which  there  are 

t 

no  check  marks  which  must  be  the  parts  that 
have  not  been  withdrawn  from  stock  up  to 
time  the  list  is  checked,  these  parts  being 
marked  with  a  letter  N.  When  the  works 
manager  again  gets  the  list — and  this  process 
can  be  repeated  as  many  times  as  desired- 
he  knows  the  exact  condition  the  order  was 
in  up  to  within  a  short  time  previous  to  the 
checking,  and  even  if  the  list  shows  a  piece 
as  being  in  the  drilling  department  that  has 
gone  on  to  the  milling  department  no  harm 
has  been  done,  for  he  knows  ivliere  to  start 
his  investigation,  which  is  far  better  than  to 
have  no  definite  point  from  which  to  begin. 
If,  on  the  other  hand,  the  works  manager 


120  MAXIMUM     PRODUCTION 

or  any  of  the  foremen  desire  to  know  con- 
cerning any  part,  the  file  in  the  office  will 
supply  the  information.  As  before  stated, 
the  necessary  facts  are  at  hand  as  soon  as 
material  is  delivered  or  transferred,  and  a 
little  work  will  put  the  information  in  shape 
for  use  whenever  needed.  There  is  a  dif- 
ference between  having  information  in  every 
conceivable  shape  and  having  it  properly 
classified  and  on  tap  for  immediate  reference. 

Further  information  is  at  the  disposal  of 
the  shop  management  in  the  shape  of  the 
daily  time  cards  turned  in  by  the  workmen, 
all  time  being  posted  to  the  reverse  side  of 
the  production  order  each  day.  Eef erence  to 
the  orders  covering  parts  or  to  the  orders 
covering  assembling  work  will  therefore 
show  how  much  time  has  been  consumed  on 
an  order  up  to  the  day  previous  to  the  refer- 
ence. The  clerk  can  furnish  the  works  man- 
ager with  information  regarding  the  condi- 
tion of  an  order,  by  turning  to  the  file  of  live 
production  orders,  and  when  checking 
through  the  various  parts  that  are  in  the  ma- 
chining department,  mark  opposite  these 
parts: 

T — Time  recorded. 

N — No  time  recorded. 


EFFICIENT    USE   OF   MATERIALS    AXD   TIME       121 


This  will  show  him  not  only  where  the 
parts  are,  but  whether  they  have  been  worked 
on  or  not,  and  through  the  information  fur- 
nished him  he  can  plan  for  maximum  pro- 
duction under  the  best  conditions,  for  once 


WORK  WANTED  AT  ONCE 

To  the  Forpman  of  the                                    Dp]- 

artraent.  The 
r  all  other  ord< 

following;  ordere  are  ur- 
WM 

gently  needed.  Give  th,em  preference  ove 

Order 

# 

Piece 

Drawing 

Order 

I 

Piece 

Drawing 

• 

FIG.     17.       REQUISITION    FOR    URGENT    WORK. 

he  knows  the  shape  an  order  is  in,  personal 
effort  will  do  the  rest.  He  will  want  to  make 
certain  demands  on  certain  departments 
after  he  knows  what  work  is  to  be  given 
preference  over  other  work,  using  Form  17 
for  this  purpose. 


UP  On  8Q1JJP  01    I 


H 

W 
H 


Q 
fr 
P 

M 

PS 
o 


03  « 

M  02 

H  § 

Is!  K 


pis 


PH    - 
O    H 

§3 

H 
02 

O 


WP^ 
H 

H  M 
O  OJ 
M  0 

^     M 

O    f? 


02 


P5 
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Q 

OO 

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O 


EFFICIENT    USE   OF   MATERIALS    AND   TIMK       123 

The  scheme  of  numbering  here  shown  will 
facilitate  investigation.  A  large  number  of 
concerns  have  a  series  of  numbers  to  cover 
the  various  orders  for  machines  and  another 
series  of  numbers  covering  the  parts  of  a  ma- 
chine. For  instance,  an  order  for  a  certain 
machine  might  be  No.  3,140  while  the  first 
part  might  be  No.  11,908,  the  second  part 
No.  11,909,  etc.  It  is  evident  that  in  looking 
up  an  order  there  is  no  such  connection  be- 
tween the  two  series  of  numbers  as  in  the 
case  of  the  method  advocated  above.  An 
order  for  a  machine  may  have  250  as  its 
number,  while  the  first  part  would  be  250.1, 
the  second  part  250.2,  the  third  250.3,  etc. 
As  soon  as  the  order  gets  under  way,  the 
workmen  know  that  the  parts  are  for  order 
250  and  the  assemblers  will  soon  fix  250  in 
their  minds,  so  that  when  it  is  desired  to 
follow  up  an  order,  any  person  looking  for 
the  parts  that  go  to  make  up  250  will  have 
no  great  difficulty  in  finding  them. 

The  assembling  of  certain  parts  into 
groups,  to  be  carried  in  stock  for  final  as- 
sembly, should  be  given  careful  considera- 
tion by  progressive  manufacturers.  In  the 
fifth  chapter  it  was  shown  that  even  special 
machines  mav  have  some  standard  parts, 


124  MAXIMUM     PRODUCTION 

and  a  study  of  the  product  would  show  where 
grouping  could  be  done  to  such  advantage 
as  would  greatly  facilitate  final  assembly. 
If  we  have  thirty  separate  parts  to  assemble, 
time  required  to  assemble  being  fifty  hours, 
and  by  grouping  certain  parts  it  is  found  that 
only  ten  pieces  are  necessary  to  assemble, 
five  pieces  being  groups  composed  of  two  or 
more  parts  each,  as  the  case  may  be,  the 
final  assembly  time  will  be  considerably  less- 
ened; any  saving  in  assembly  time  is  always 
an  object,  especially  when  delivery  is  the  im- 
portant consideration.  The  work  of  group- 
ing can  be  done  in  odd  moments  or  when 
there  is  a  slackening  in  orders,  the  results  of 
which  would  certainly  justify  the  efforts. 

To  eliminate  the  delays  and  annoyances 
that  can  usually  be  found,  and  to  get  maxi- 
mum production  in  the  shortest  time  possi- 
ble, further  aid  should  be  employed  as  fol- 
lows: 

1 — An  intelligent  advance  planning  of  all 
work, 

2 — A  standardization  of  operations.  In 
processing  men  need  jobs,  material,  draw- 
ings, tools,  gauges  and  jigs,  and  it  should 
be  the  duty  of  someone  to  see  to  it 
that  these  items  are  supplied  them,  not  one 


EFFICIENT    USE    OF    MAT  I- IMA  l.S    AM)    TIME       125 

thing  at  a  time,  nor  all  of  them  just  as  soon 
as  they  have  completed  a  previous  job,  but 
/;/•  advance.  As  orders  come  in,  as  shown  l>v 

• 

the  methods   herein  described,   they   should 

* 

be  analyzed  as  to  consecutive  operations;  a 
date  of  completion  determined;  a  planning 
schedule  drawn  up  and  job  tickets  written  up 
and  classified  as  " available'  or  "not  avail- 
able.' As  the  work  is  planned  for  men  and 
machines,  they  should  be  arranged  in  a 
planning  board  as  follows: 

l--Jobs  in  operation. 

2 — Jobs  to  be  taken  up  next. 

3 — Jobs  to  follow. 

It  is  essential  that  the  planning  schedule 
be  kept  up  to  date  at  all  times,  from  which 
it  is  an  easy  matter  to  prepare  for  work 
coming  in,  and  to  get  in  readiness,  in  ad- 
vance of  requirements,  what  is  necessary  to 
get  out  the  work.  Intelligent  planning  and 
dispatching  of  all  work  in  a  machine  shop- 
rnachining,  assembly  and  erection,  trucking 
and  transportation,  tool  making — is  a  mighty 
factor  in  increasing  efficiency,  and  in  con- 
junction with  the  supervisional  agency  de- 
scribed in  this  chapter,  will  work  wonders 
in  any  shop. 

The  matter   of  standardization  of  opera- 


126  MAXIMUM     PRODUCTION 

tions   is   another    important    consideration. 
There  are  two  things  to  keep  in  mind- 

1 — That  there  is  the  unnecessary  in  the 
work. 

2-  -That  there  is  a  reasonable  and  proper 
time  to  allow  for  completing  it. 

By  no  stretch  of  the  imagination  is  it  pos- 
sible to  conceive  how  a  hasty,  superficial  ex- 
amination, which  is  the  usual  procedure,  can 
determine  the  unnecessary,  or  the  best  time 
to  allow  for  a  piece  of  work.  It  is  because 
it  has  been  thought  possible  that  the  usual 
method  of  setting  piece  rates  has  been  re- 
sponsible for  so  much  dispute  and  restricted 
production  in  the  past,  and  this  will  continue 
just  as  long  as  such  unscientific  methods  of 
determining  equivalency  are  employed. 

One  of  the  most  efficient  means  of  estab' 
lishing  what  is  wrong  with  the  conditions, 
where  the  faults  are  in  the  planning,  and  the 
best  time  to  allow  for  any  work,  is  through 
a  careful  and  scientific  analysis,  listing  out- 

1 — What  is  done. 

2 — How  it  is  done. 

3- -The  equipment  used. 

4 — The  operation  itself. 

5 — The  working  conditions. 

6 — The  time  taken. 


EFFICIENT   USE   OF   MATERIALS    AND   TIME       1'JT 

All  of  which,  carefully  studied,  will  reveal 
facts  that  will  prove  of  material  assistance 
in  any  campaign  of  shop  betterment.  Once 
this  standardization  is  completed,  it  is  pos- 
sible to  determine  the  ratio  between  the 
time  taken  and  allowed,  applicable  to  men, 
machines,  foremen,  department,  on  the  basis 
of  which  an  "efficiency  reward"  could  be 
made,  which  would  do  more  to  create  a 
spirit  of  co-operation  and  a  willingness  to 
turn  out  a  maximum  amount  than  all  the 
driving  tactics  that  could  be  schemed  out  by 
the  keenest  mind  existing. 


CHAPTER  VII 

BETTEK     DELIVEBIES— MORE     SATISFIED 

CUSTOMERS 

TT  was  a  wise  man  who  decided  to  incor- 
A  porate  as  a  part  of  his  letter-head: 
"Agreements  subject  to  strikes,  accidents, 
fires  and  other  causes  beyond  our  control ;" 
but  little  did  he  think  how  many  times  it  was 
destined  to  be  used,  not  only  to  cover  such 
cases  as  fires,  accidents,  and  excusable  causes, 
but  many  inexcusable  ones  as  well.  Today 
the  clause  above  quoted  is  either  on  all  busi- 
ness stationery  or  is  taken  for  granted,  and 
it  is  safe  to  sav  that  nearly  every  business 

v  »/  •/ 

house  uses  it  many  times  during  a  year  to 
explain  their  nonfulfillment  of  promises. 
While  I  will  grant  that  a  manufacturer  is 
often  in  no  way  to  blame  because  he  has 
failed  to  forward  his  shipment  according  to 
schedule,  there  are  a  greater  number  of 
times  when  no  real  excuse  exists — unless  per- 
haps it  is  carelessness,  which  of  course  would 
not  be  offered  as  an  excuse  even  by  the 
frankest  offender. 

128 


PROFIT    IX    PROMPT    DELIVERIES  129 

Every  manufacturer  who  reads  this  chap- 
ter is  a  receiver  of  materials  as  well  as  a 
shipper,  and  while  the  argument  is  intended 
more  for  the  shipper  than  for  the  receiver  of 
materials,  we  will  start  the  discussion  from 
the  viewpoint  of  the  receiver. 

Is  it  not  a  fact,  that  almost  daily  you  are 
disappointed  in  not  receiving1  the  notice  of 
shipment,  covering  materials  your  works 
manager  is  anxiously  awaiting! 

Is  it  not  a  fact,  that  almost  daily  you  re- 
ceive in  your  mails  about  such  replies  as  the 
following,  in  answer  to  your  letters  asking 
why  the  materials  you  have  ordered  have  not 
been  shipped  as  promised? 

Yours  of  the  10th  received.  We  regret  to  advise 
that  owing  to  causes  over  which  we  had  no  control 
we  have  found  it  impossible  to  make  shipment  as 
promised,  but  we  expect  to  forward  them  about  the 
25th. 

Is  it  not  a  fact  that  almost  daily  you  or 
your  assistants  call  up  the  freight  offices,  re- 
garding certain  materials  which  have  been 
shipped,  only  to  be  advised — "nothing  as 
yet"? 

These  are  conditions  that  exist  almost 
everywhere,  and  while  they  would  not  be 


130  MAXIMUM     PRODUCTION 

worthy  of  more  tlian  passing  consideration 
if  they  only  ruffled  a  man's  temper,  as  they 
sometimes  do,  they  are  entitled  to  careful  at- 
tention as  they  directly  concern  the  success 
of  any  manufacturing  enterprise.  You  no 
doubt  feel  at  times  like  doing  business  with 
some  other  concern  than  the  one  you  are  now 
dealing  with,  thinking  perhaps  that  you 
might  get  better  deliveries  by  so  doing,  which 
brings  me  to  this  question: 

Do  you  as  a  receiver  of  materials,  feeling 
as  you  do  over  your  disappointment  in  not 
receiving  notices  of  shipment — the  letters  of 
excuses  and  the  statement,  "nothing  as  yet,' 
ever  stop  to  consider  that  the  receiver  of 
your  materials  may  be  in  exactly  the  same 
position  as  you  are  often  in? 

I  will  grant  that  you  often  look  to  those 
from  whom  you  purchase,  in  order  to  make 
proper  deliveries  to  your  customers.  Your 
customers,  in  their  turn,  whether  they  have 
their  trade  looking  to  them  for  shipments 
when  promised  or  whether  they  are  direct 
users  of  what  they  purchase  from  you,  look 
to  you  for  as  prompt  deliveries  as  possible,  so 
that  your  success  (in  their  eyes  at  least)  de- 
pends to  a  large  degree  upon  your  ability 
either  to  make  prompt  shipments,  or  to  con- 


PROFIT    IN    PROMPT    DELIVERIES  131 

vince  them  that  their  interests  are  receiving 
your  best  attention.  If  you  cannot  do  this, 
you  may  be  running  the  risk  of  having  some 
of  your  business  go  to  your  competitors. 

You  may  ask  how  can  the  maximum  re- 
sults be  obtained  in  the  way  of  getting  ship- 
ments off  according  to  schedule?  The  best 
results  along  these  lines  can  be  obtained  only 
when  proper  attention  has  been  given  to  con- 
ditions, present  and  future,  before  making 
a  promise,  and  the  work  followed  carefully 
until  you  know  that  you  will  be  able  to  ship 
as  promised,  or  that  you  will  not  be  able 
to  do  so. 

A  promise  cannot  keep  itself  any  more 
than  a  shipment  can  make  itself,  yet  this 
seems  to  be  the  principle  that  so  many  work 
upon.  I  have  known  cases  where  promises  to 
ship  have  been  made  and  nothing  more  has 
been  thought  about  them  until  letters  were 
received  asking  for  information  as  to  the 
shipments,  and  as  business  courtesy  de- 
manded replies,  the  letter  heretofore  quoted 
was  the  result.  I  am  therefore  of  the  opinion 
that  a  promise  composed  of  about  one-quar- 
ter discretion  in  making  and  about  three- 
quarters  energy  in  fulfilling,  will  go  a  longer 
way  towards  enabling  the  manufacturer  to 


132  MAXIMUM     PRODUCTION" 

ship  according  to  schedule  than  anything 
else.  By  "energy"  I  do  not  mean  hustle  and 
bustle,  at  the  last  minute,  in  an  almost  super- 
human attempt  to  rush  the  work  through  the 
shops  and  onto  the  cars,  in  an  effort  to  "make 
good,"  but  an  energy  that  is  in  evidence 
from  the  time  the  order  is  received  and  the 
promise  made  until  the  material  is  on  the 
cars  and  finally  at  its  destination.  Any  ar- 
rangement that  will  enable  you  to  make  de- 
liveries as  close  to  schedule  as  it  is  possible 
to  make  them  should  have  your  careful  at- 
tention, for  it  will  mean  much  in  the  way  of 
more  satisfied  customers,  better  deliveries 
from  those  from  whom  you  purchase,  and 
lower  costs  through  an  increased  production, 
all  these  being  points  which  materially  assist 
in  making  an  enterprise  successful. 

It  is  very  likely  that  almost  every  order 
you  receive  is  accompanied  by  a  request  to 
state  about  when  shipment  will  be  made;  is 
it  not  well  to  have  some  well  defined  method 
of  procedure  in  filling  your  orders?  It 
should  need  no  argument  to  convince  a  manu- 
facturer that  the  shipping  of  materials  when 
promised  is  beneficial  to  the  whole  business 
structure. 

In  any  establishment    of    ordinary    size, 


PROFIT    IX    PROMPT    DELIVERIES  133 

those  concerned  in  the  handling  of  an  order 
from  its  receipt  until  shipment  are : 

Chief  Order  Clerk. 

Works  Manager. 

Chief  Stores  Clerk. 

Shipping  Clerk. 

Indirectly,  the  customer  depends  upon  the 
shops  for  his  shipment;  but  directly,  he  de- 
pends upon  the  shipper,  who  in  turn  cannot 
make  shipment  until  the  shops  furnish  him 
the  finished  product,  the  shops  in  their  turn 
look  to  the  stores  department  for  the  mate- 
rials necessary  to  complete  an  order,  and 
naturally  nothing  can  be  done  until  the  order 
department  has  given  the  necessary  orders 
for  the  work.  At  least,  this  should  be  the 
.case;  but  there  are  places  where  verbal 
orders  seem  to  receive  as  much  considera- 
tion as  written  ones — a  practice  that  is  pro- 
ductive of  no  possible  good.  At  any  rate, 
the  order  department  is  looked  to  indirectly 
by  all  concerned  in  the  manufacture  of  any 
article ;  so  without  further  argument,  we  may 
assign  to  this  department  the  important  duty 
of  keeping  track  of  all  orders  from  the  time 
of  their  receipt  until  delivery  is  finally  made 
to  the  customer. 

If  the  four  men  heretofore  mentioned  are 


134  MAXIMUM     PRODUCTION 

allowed  to  act  as  one  body,  with  full  power, 
the  result  is  going  to  be  better  deliveries  no 
matter  under  what  conditions  the  company 
may  be  operating.  Organize  a  committee, 
composed  of  these  four  men ;  make  them  re- 
sponsible for  promises  and  deliveries — and 
you  can  depend  upon  it  that  they  will  exercise 
care  before  they  set  a  time  when  an  order 
will  be  shipped ;  for  in  their  discussions,  they 
will  (or  should)  ascertain  how  much  of  an 
order  is  ready  to  ship,  how  much  must  be 
built,  what  is  in  stock  ready  to  assemble, 
what  is  in  stock  ready  to  process,  what  must 
be  purchased  outside  and  about  when  this 
material  can  be  secured,  how  long  it  will  take 
the  shops  to  process  and  assemble,  etc. ;  and 
if  track  is  kept  of  the  progress  the  order  is 
making,  from  time  to  time,  there  is  every 
reason  to  expect  that  the  shipment  will  go 
forward  about  when  promised. 

Let  us  take,  for  example,  a  plant  manu- 
facturing engines  and  boilers,  and  let  us  out- 
line the  arrangement  that  will  enable  the 
company  to  make  more  prompt  deliveries. 
We  will  assume  that  the  company  has  al- 
lowed a  committee  to  be  formed  composed  of 
the  chief  order  clerk,  works  manager,  chief 
stores  clerk,  and  shipping  clerk,  the  order 


PROFIT    IN    PROMPT    DELIVERIES  L35 

clerk  being  responsible  for  the  routine  and 
clerical  detail  connected  with  the  work.  As 
the  mails  are  opened  and  sorted,  all  orders 
are  naturally  turned  over  to  the  order  de- 
partment, and  these  orders  can  be  written  up  ; 
but  before  sending  them  to  the  various  de- 


1     23466     7     8     0    10   11  12  13  14  15  1C  17  18  19  20  21  22  23  24  26  26  2J  28  H  30  31 

OFFICE    COPY 


Buffalo.  N.  Y..      June  23  1907 

Sold  To        William  Jenkins  and  Company  Date  Sold          June  21  1907 

Address  Utica.  New  York  Sold  By        Johnson 

Destination  ..  .  Our  Order  #     3445 

Ship  Via  Fast  freight  Their  Order*    A  2558V 


One  cylinder  head  X  442  3441 

One  cylinder  B  20  2811 

One  piston  X  440  344  J 

This  It  a  rush  order 


Ttu  Ena  Mdgazfnt 

FIG.  19.       INITIAL  RECORD  OF  ORDER.       MADE  IN  QUADRUPLICATE. 

partments,  they  are  referred  to  the  commit- 
tee before  mentioned,  to  be  acted  upon  daily, 
along  the  lines  just  suggested.  Four  copies 
of  each  order  should  be  made,  one  for  the 
office  (Figure  19),  one  for  the  shipper,  one 
for  the  works  manager,  and  one  to  be  sent  to 
the  customer  as  an  acknowledgment  of  the 
order  (Figure  20).  It  will  be  noticed  that 


136  MAXIMUM     PRODUCTION 

Form  20  bears  the  possible  date  of  shipment 
while  it  is  checked  at  the  top  under  the  same 
date  as  shown  by  the  clip.  The  copies  for 
the  works  manager  and  the  shipper  should 


ACKNOWLEDGMENT 


Buffalo.N.Y.,  June  23  1907. 

Sold  To    William  Jenkins  and  Company  Date  Sold     June  21  1907. 

Address        Utlca.  New  York  Sold  By        Johnson 

Destination      "  "  Our  Order*  3445 

Ship  Via      Fast  freight  Their  Order  #  A  25589 


One  cylinder  head  X  442  3441 

One  cylinder  B  20  2811 

One  piston  X  440  3441 

This  is  a  rush  order 


We  herewith  acknowledge  receipt  of  your  order,  which  has  been  properly  entered  as  ab»ve, 
for  which  accept  our  thanks.  We  will  endeaver  to  make  Shipment  on  ox  before 

J.4D?-??-!.??-7- THE  ENTERPRISE  COMPANY. 


The  Engineering  Uagtuine, 

FIG.     20.        ACKNOWLEDGMENT     OF    ORDER. 

be  marked  in  the  same  way  by  using  the 
metal  markers.  Upon  filing  these  orders  in 
an  alphabetical  file,  we  have  each  order  filed 
by  name  of  customer  and  cross-indexed  by 
possible  date  of  shipment;  and  as  the  three 
individuals  most  concerned  have  copies  of 
the  orders  before  them,  it  can  be  readily  seen 
that  it  is  possible  for  each  and  every  one  of 
the  three  to  keep  track  of  the  progress  of  an 
order  until  the  shipment  is  made. 


PROFIT    IN    PROMPT 


137 


In  conjunction  with  this  method  of  han- 
dling the  orders,  it  would  be  well  to  use  a 
recapitulation  sheet,  compiled  each  day  by 
the  order  department,  to  be  considered  by 
the  committee  before  mentioned  at  its  daily 
conferences.  A  sample  (Figure  21)  is  here 
shown  with  entries.  This  will  show  the  com- 


SHIPMENTS  ARRANGED 

For.     lune  29  1907 

•  According  to  our  records,the  following  shipments  have  been  arranged  for  the  above  date. 

If  anything  has  occured  in  your  department  to  change  your  plans,  advise  so  a  new  date 

may  be  set  and  the  customer  notified  of  the  change  . 

Name 

Material 

Fgt. 

Exp. 

Order  $ 

Can  w<"  ship  on  above  date 

New 

Yes 

No 

If  not,  why 

Date 

Smith  and  Sons 

Engine  base 

3421 

Error  In  shop 

MO 

Wm.  Jenkins  and  Co. 

Cylinder  with  head 

' 

and  piston 

3445 

Jones-and  Co. 

Complete  Engine 

2660 

Johnson  and.  Frank 

Boiler  Fronts 

3010 

THE  ENTERPRISE  COMPANY, 
Order  Department. 
per      F.  A.James 

The  Engineering  llagattoit 

FIG.   21.      RECAPITULATION   SHEET   FOR   SHIPMENTS    ARRANGED. 

mittee  the  total  shipments  promised  for  any 
one  day,  and  by  having  each  day's  slip  show 
the  shipments  arranged  for  the  following 


138  MAXIMUM     PRODUCTION 

day,  it  is  an  easy  matter,  in  case  it  is  abso- 
lutely impossible  to  make  certain  shipments 
as  promised,  to  set  new  dates  for  shipment. 
It  should  be  the  duty  of  the  order  depart- 
ment to  inform  the  customers  of  the  changes ; 
this  will  not  only  forestall  complaints,  but 
will  create  the  impression  in  the  minds  of 
some  customers  at  least  that  their  interests 
have  not  been  ignored  altogether,  for  if  you 
receive  an  unsolicited  letter  from  a  concern 
from  whom  you  are  purchasing,  in  which 
they  state  that  they  found  it  was  going  to 
be  impossible  to  make  the  shipment  as  prom- 
ised, but  that  they  would  be  able  to  on  such 
and  such  a  date,  you  certainly  feel  in  a  much 
better  state  of  mind  than  if  you  should  re- 
ceive no  notice  of  shipment  and  no  letter 
explaining  the  reason. 

After  a  shipment  has  been  made,  in  cases 
where  it  is  delayed,  the  manufacturer  should 
keep  after  the  railroad  company  until  de- 
liveries are  shown.  A  "  tracer "  is  such  a 
common  thing  that  it  is  not  necessary  to 
show  one  here,  but  the  form  shown  in  Figure 
22  should  be  used  in  conjunction  with  trac- 
ers so  that  the  railroad  company  may  be  re- 
minded of  the  fact  that  they  have  been  asked 
to  place  a  tracer  after  certain  shipments. 


PROFIT    IN    PROMPT    DELIVKH I  liS 


139 


SHIPMENTS 


July  5  1907 


George  Franklin  _ 
New  York  Central 


Agent 


Railroad 


To  the  agent.-  Let  us  know  at  once  if  you  have  received  any  advice  regarding;  the 
delivery  of  the  shipments  listed  below 


Date  of  tracer.      June  20th 

To,     The  Howard^Manufacturlng  Company 


,500  Franklin  Street 
New  York  N.  Y. 


Date  shipped  .    June  _1  Oth 
Materials  claimed  short 


Remarks      None  of  this  shipment  has  been  delivered  and  these  people  are  In  need 
.  of  the  material 


THE  ENTERPRISE  COMPANY, 


The  Engineering  Maguzint 

FIG.  22.   SUGGESTED  FORM  FOR  TRACER. 

In  many  instances,  upon  receipt  of  these 
notices,  the  agent  will  take  up  the  matter 
with  those  along  the  line  and  this  will  assist 
to  a  certain  extent  in  bringing  about  better 
deliveries  than  would  be  secured  were  the 
railroad  company  to  receive  no  such  remind- 
ers. If  the  agent  has  received  no  advice,  he 
will  say  so,  and  if  you  take  up  this  point  with 
your  customers,  they  will  be  quick  to  see  that 
vour  interest  did  not  cease  when  shipments 


140  MAXIMUM     PRODUCTION 

were  made — a  decided  point  in  your  favor, 
and  it  is  on  such  points  as  this  that  the  suc- 
cess of  your  business  depends. 

The  system  is  simple,  and  while  it  would 
require  a  little  work  each  day  in  order  to 
obtain  maximum  results,  does  not  the  end  in 
view  justify  the  means?  Let  us  sum  up 
briefly  the  advantages  to  be  derived  through 
some  such  system,  devised  to  meet  your  own 
conditions.  In  the  first  place  your  works 
manager,  order  clerk,  stores  clerk,  and  ship- 
ping clerk  all  know  and  have  collectively 
agreed  upon  the  dates  of  shipment,  the 
points  peculiar  to  each  order  having  received 
attention  before  this  was  done ;  the  orders 
are  constantly  before  them,  the  metal  mark- 
ers showing  the  dates  of  shipments  to  be 
made;  and  through  co-operation,  which 
should  be  insisted  upon,  they  will  be  able 
practically  to  see  the  end  at  the  start. 

The  works  manager  will  be  in  a  position  to 
plan  his  work  to  better  advantage,  for  he 
can  notify  his  foremen  what  he  wants  and 
when  he  wants  it,  they  in  their  turn  giving 
their  men  the  necessary  orders  and  instruc- 
tions that  will  start  the  desired  work  along 
and  through  the  shops  in  the  most  systematic 
way,  so  that  in  reality  we  have  the  whole 


PROFIT    IN    PROMPT    DKLlVKRIiiS  141 

force  doing  their  share  in  an  effort  to  get  the 
work  through  on  time. 

The  stock  clerk  will  know  what  stock  is 
necessary  to  get  ready  for  the  shops,  and  he 
will  also  know  what  has  to  be  purchased  out- 
side. He  can  make  the  necessary  requisi- 
tions on  the  purchasing  department,  with  no- 
tations as  to  iclien  he  wants  the  materials 
that  are  to  be  ordered. 

The  purchasing  department  can  keep  after 
the  people  with  whom  the  orders  were  placed, 
which  in  itself  will  have  an  influence  in  ob- 
taining better  deliveries ;  for  once  you  know 
what  you  want  and  when  you  want  it,  you 
can  in  the  majority  of  cases,  by  keeping  after 
the  concerns  from  whom  you  ordered,  get 
your  materials  in  time  to  enable  you  to  keep 
your  promise  to  your  customers. 

Your  order  clerk  each  day  will  bring  to 
the  attention  of  the  others  the  list  of  ship- 
ments arranged  for  the  following  day,  and 
if  new  dates  have  to  be  set,  it  can  be  done 
and  he  can  so  notify  the  people  to  whom  the 
materials  were  going.  At  the  same  time  he 
can  take  up  with  the  others  the  possibility 
of  getting  future  shipments  off  as  promised, 
and  by  keeping  track  of  the  details  and 
looking  after  the  clerical  work,  he  is  in  a  po- 


142  MAXIMUM     PRODUCTION 

sition  to  give  valuable  information  as  to  the 
status  of  any  order. 

The  shipping  clerk,  knowing  after  each 
day's  conference  what  is  to  go  forward 
within  the  two  or  three  days  following,  is  in 
a  position  to  see  to  getting  everything  in 
readiness  for  shipment  on  the  day  set;  and 
if  anything  happens  to  make  it  necessary  to 
change  any  date  set,  he  knows  it  the  day 
preceding  and  can  be  governed  accordingly. 
The  shipping  clerk  is  therefore  in  a  position 
to  make  his  work  count  for  something,  as 
he  is  able  to  concentrate  his  attention  upon 
the  accomplishment  of  something  definite  and 
is  not  forced  to  do  a  lot  of  work  that  will 
count  for  nothing. 

In  brief,  we  have  a  combination  of  brains 
working  together  along  the  same  lines  and 
with  the  same  end  in  view,  and  this  will  ac- 
complish more  than  could  be  accomplished 
by  individual  effort  along  widely  different 
lines.  The  result  of  such  effort  would  be 
more  prompt  deliveries  and  therefore  more 
satisfied  customers — the  desire  of  every 
manufacturer. 


CHAPTER  VIII 

SCIENTIFIC     MANAGEMENT     IN     THE 

FOUNDRY 

T  F  the  result  of  the  recent  rate  hearing  be- 
fore the  Interstate  Commerce  Commis- 
sion at  Washington  does  nothing  else  be- 
yond placing  squarely  before  the  American 
people  the  matter  of  a  better  and  more  scien- 
tific corporation  management,  this  in  itself 
can  be  considered  an  accomplishment  of  ines- 
timable value;  for  the  outcome  is  going  to 
mean  but  one  thing — an  industrial  awaken- 
ing which  will  result  in  the  saving  of  millions 
of  dollars  yearly  that  are  now  being  lost 
through  unscientific  methods  in  the  conduct 
of  business  enterprises. 

The  hearing  brought  out  the  point  that 
scientific  railroad  operation  would  yield  an 
enormous  saving,  estimated  at  $300,000,000 
yearly.  Senator  Aldrich  is  quoted  as  saying 
that  inefficient  governmental  management  is 
responsible  for  an  estimated  loss  of  another 
$300,000,000  yearly.  In  other  words,  $600,- 
000,000  yearly  in  railroad  and  governmental 

143 


14:4:  MAXIMUM     PRODUCTION 

circles  alone — an  amount  certainly  worth 
trying  to  save. 

If  it  were  possible,  therefore,  to  outline  for 
each  one  of  our  great  industries — automo- 
bile, foundry,  machine-tool,  electrical  ma- 
chinery, etc. — the  possible  saving  that  would 
result  from  a  more  perfect  management,  the 
amount  in  conjunction  with  that  already 
mentioned  would  result  in  a  figure  showing, 
beyond  any  possibility  of  questioning,  the 
absolute  necessity  for  taking  such  measures 
as  should  ultimately  produce  a  nation  of 
more  efficient  and  prosperous  industrial  un- 
dertakings. 

To  the  skeptic  (and  unfortunately  there 
are  many  of  them)  the  idea  of  an  ideal  man- 
agement is  an  absurdity,  this  conclusion  be- 
ing based  on  the  assumption  that  idealism 
and  commercialism  cannot  be  merged.  To 
those  who  are  of  this  mind,  the  statement 
made  at  the  rate  hearing  by  Louis  D.  Bran- 
deis  should  be  carefully  considered: 

We  shall  show  you  how  scientific  management, 
when  applied  to  the  simple  operation  of  loading  a 
railroad  car  with  pig  iron,  increased  the  perform- 
ance of  the  individual  worker  from  12l/2  to  47  tons; 
how,  when  applied  to  shovelling  coal,  it  doubled  or 
trebled  the  performance  of  the  shoveller.  How,  when 
applied  to  the  operations  of  a  machine  shop,  it  de- 


SCIENTIFIC    FOUNDRY    MAN  A  (J  KM  KNT  145 

veloped,  in  certain  operations,  increases  ranging  from 
400  to  1,800  per  cent.  How,  when  applied  to  brick 
laying,  the  day's  accomplishment  rose  from  1,000  to 
2,700  brick. 

In  this  connection  the  following  editorial 
which  appeared  in  a  recent  issue  of  the 
Progress  Magazine  will  also  prove  of  in- 
terest : 

Idealism  and  Commercialism  are  not  antagonis- 
tic. Idealism  is  the  very  life  and  spirit  of  the  com- 
mercial world.  It  is  the  purpose  of  Idealism  to  con- 
tinually enrich  the  human  mind  so  that  there  will 
be  more  and  more  to  work  with;  it  is  the  purpose  of 
Commercialism  to  work  out  in  practical  life,  what- 
ever the  mind  can  secure.  Idealism  is  the  mother  of 
the  idea,  the  plan,  the  invention.  Commercialism  is 
the  father  of  the  finished  product.  It  is  Idealism 
that  discovers  the  thing  and  Commercialism  that 
makes  it  serviceable  or  puts  it  to  work  in  actual  life. 

What  has  this  to  do  with  the  foundry  in- 
dustry! More  than  one  may  at  first  imagine. 
The  closer  we  approach  an  ideal  state,  the 
more  we  are  able  to  attain.  The  loftier  our 
ideal,  the  greater  the  achievement  in  the  long- 
run,  from  which  it  is  easily  seen  why  the  real- 
ization of  the  greatest  success  in  the  foundry 
or  any  other  business  is  contingent  upon- 

1-  -Having  an  ideal. 

2 — Making  a  consistent  effort  to  attain 
this  ideal. 


146  MAXIMUM     PRODUCTION 

3 — Placing  the  ideal  high  enough  to  make 
the  effort  worth  while. 

We  get  in  life  about  what  we  deserve,  and 
this  applies  to  the  corporate  enterprise  as 
well  as  to  the  individual.  If  we  deserve 
much,  we  attain  in  proportion.  A  writer  has 
well  said,  "Men  fail  for  lack  of  some  aim, 
but  better  than  some  aim  is  one  aim  by  which 
good  fortune  is  labelled  i  reward  by  divine 
right.'  " 

In  the  foundry  industry,  investigation 
would  develop  the  fact  that  it  has  suffered 
much  from  a  lack  of  one  aim,  for  it  is  safe  to 
say  that  there  are  but  few  cases  where  the 
rule  has  been  one  aim  placed  high  enough 
and  conscientiously  pursued. 

This  may  seem  a  criticism  not  borne  out 
by  the  facts  in  the  case.  If  it  is  possible, 
therefore,  to  place  before  those  who  are  in- 
terested in  the  industry  a  mental  picture  of 
conditions  as  they  exist  (to  a  greater  or  less 
degree)  in  almost  every  foundry,  the  strength 
or  weakness  of  the  above  charge  may  be 
established.  With  this  end  in  view,  the  fol- 
lowing short  story  has  been  written;  and 
while  perhaps  a  radical  departure  from  the 
usual  style  of  engineering  discussion,  it  is 
hoped  that  the  picture  the  story  will  call  up 


SCIENTIFIC    FOUNDRY    MANAGEMENT  147 

may  more  strongly  emphasize  many  of  the 
weaknesses  that  will  be  recognized  as  exist- 


ing. 


Is  THIS  EFFICIENCY? 


Jennings,  the  new  moulder,  had  been  in 
the  shop  two  days  "getting  his  hand  in,' '  as 
he  termed  it,  and  was  on  hand  on  the  morn- 
ing of  the  third  day,  prepared  to  show  the 
"  outfit "  that  he  could  hold  his  own  with  the 
best  of  them.  To  his  helper,  a  hard-work- 
ing chap,  he  made  the  remark : 

"Are  you  ready  for  a  hard  day's  work, 
Byan?" 

"I  am;  and  if  I  was  not,  I'd  have  to,  any- 
way. Those  who  work  in  this  shop  go  some, 
I  can  tell  you.  It's  run,  jump,  and  chase 
around  the  whole  blessed  time,  and  you'll 
find  it  out  before  you  have  been  here  very 
long. ' ' 

"Well,  perhaps  you're  right.  I  did  my 
share  of  this  jumping  business  for  two  days, 
but  I'm  a  new  hand  and  didn't  expect  to 
have  things  handed  to  me  on  a  platter.  There 
goes  the  whistle — let's  get  under  way.' 

Arriving  on  his  floor,  Jennings  looks  it 
over  for  a  few  moments,  and,  turning  to 
Eyan,  says  with  disgust: 


148  MAXIMUM     PRODUCTION 

"Can  you  beat  that  for  a  sand  heap?  The 
night  gang  must  have  thought  I  wanted  to 
make  mud  pies  instead  of  moulds.  It's  wet 
enough  to  take  a  bath  in.  Yesterday  morn- 
ing the  sand  was  as  dry  as  the  Sahara  and 
as  hot  as  the  place  I  told  my  side  partner 
to  go  to.  And  will  you  look  at  the  gaggers 
sticking  out  of  the  sand — not  one  of  'em  re- 
moved. ' 

At  this  point  the  shop  foreman  appears 
on  the  scene. 

"Say,  boss,'  says  Jennings,  "is  this  the 
way  the  night  gang  is  supposed  to  leave  the 
sand  heap?" 

"Well,  no ;  but  it  can't  be  helped,  so  sail  in 
and  fix  it  up  so  you  can  start  a  job  I  have 
picked  out  for  you." 

"All  right,  boss;  I'm  a  good  sailor,  but  I 
can't  make  moulds  and  cut  sand  heaps  at  the 
same  time." 

"I  don't  see,  Jennings,  as  there  is  any  ne- 
cessity for  bristling  up  so  over  it.  Other 
men  in  the  shop  are  up  against  the  same 
thing  this  morning  and  I'm  not  asking  you 
to  do  two  things  at  once.' 

As  the  foreman  walks  off  Jennings  savs 

^j  •/ 

to  Eyan: 

"Go  and  get  some  dry  sand  and  a  little 


SCIENTIFIC    FOUNDRY    MAXAGKMKXT  149 

new  sand  also,  while  I  perform  the  high-class 
stunt  of  removing  gaggers  from  a  sand  heap 
at  forty  cents  per  hour.  Here  goes  my  fine 
start  that  I  was  banking  on.' 

After  getting  the  gaggers  and  rods  out  of 
the  heap,  tempering  the  sand,  and  getting  it 
in  readiness  for  use,  he  tells  his  helper  to 
mix  some  facing  while  he  hunts  the  foreman. 
Meeting  him  down  by  the  cupola,  he  says : 

"I  am  ready  for  that  job  you  mentioned 
just  now.' 

"Well,  Jennings,  we  were  notified  that  the 
pattern  I  was  going  to  give  you  has  got  to 
be  changed,  and  I  haven't  had  time  to  look 
up  another  for  you  since.  Come  with  me  and 
we  will  find  something.' 

After  a  trip  to  his  office  to  look  up  his 
orders,  he  takes  Jennings  to  the  pattern 
house  and  has  a  pattern  brought  out. 

"Here,  Jennings,  make  one  from  this  pat- 
tern. I  will  have  the  cores  made  right  away, 
so  they  will  be  ready  when  you  are.  See 
Tony,  the  flask  boss,  about  a  flask  for  it." 

Going  back  to  his  floor,  he  tosses  the  pat- 
tern onto  the  sand,  looks  it  over,  and  meas- 
ures it  up,  after  which  he  asks  Ryan  where 
he  is  likely  to  find  Tony. 

"Find  Tony!    Sure  and  you've  got  me  this 


150  MAXIMUM     PRODUCTION 

time.  Try  the  flask  yard;  if  he's  not  there, 
try  the  pattern  house;  if  this  doesn't  locate 
him,  you  will  probably  find  him  in  the  back 
end  of  the  core  room  eating  a  lunch.  If  this 
don't  work,  start  all  over  again.  Tony  is  a 
hard  man  to  find  when  vou  want  him." 

%/ 

"Here  is  where  the  rebellion  starts,  Eyan. 
I  am  not  going  to  do  a  'hot  foot'  after  Tony. 
I  didn't  enter  a  Marathon  race  when  I  hired 
out.  I'm  here  to  make  castings,  if  I  can  ever 
get  started.  Look  him  up  and  tell  him  I  want 
a  flask,  and  be  quick  about  it.' 

Eyan  starts  out  to  find  Tony  while  Jen- 
nings goes  over  to  the  moulder  next  to  him. 

"Well,  Bill,  how  is  she  going  this  morn- 
ing!" 

"Oh,  after  a  fashion.  Things  could  go  a 
lot  better.  I've  been  on  this  job  two  days 
now  and  I  feel  like  shaking  the  whole  thing 
out.  First  they  give  me  a  pattern  that  nearly 
pulled  the  mould  to  pieces  when  I  drew  it, 
and  then  to  improve  on  the  thing  I  get  a  flask 
that's  ready  to  fall  apart.  The  cores  don't 
fit,  either,  and  I've  wasted  I  don't  know  how 
long,  filing  and  fitting  to  get  them  into  place. 
They  must  make  their  cores  out  of  cement 
here ;  they  are  so  hard." 

"What's  the  matter  with  the  place,  Bill? 


SCIENTIFIC    FOUNDRY    MANAGEMENT  151 

Are  they  running  a  foundry  for  fun  or  to 
make  money  ?' 

"Search  me.  I  don't  see  any  fun  in  the 
thing  and  I  can't  figure  out  where  any  one 
would  get  rich  here,  judging  from  some  of 
the  boneheaded  stunts  I've  seen  pulled  off.' 

Eyan  comes  along  with  the  statement  that 
Tony  is  busy  getting  flasks  for  other  work 
and  will  be  up  as  soon  as  he  can. 

"Have  I  got-  to  loaf  around  on  this  job 
waiting  until  Tony  gets  good  and  ready  to 
get  me  some  of  their  old  fire-wood  to  work 
with?  Where  is  the  boss!" 

"Say,  boss,"  as  the  foreman  approaches, 
"why  can't  Tony  stretchy  point  and  get  a 
flask  for  this  job?  At  the  rate  I'm  going  I'll 
never  get  started. ' 

"All  in  good  time,  Jennings;  all  in  good 
time.  You  must  remember  that  you  are  not 
the  only  man  in  the  shop  to  get  started  in 
the  morning.  There  are  a  few  others.' 

"All  right,  if  it  suits  you,  I  suppose  it  will 
have  to  go;  but  I'll  be  blessed  if  I  see  where 
you  get  any  good  out  of  me  at  this  rate.' 

' '  Oh,  you  can  speed  up  when  you  get  your 
flask." 

About  fifteen  minutes  later,  Tony  appears 
and,  measuring  the  pattern,  says: 


152  MAXIMUM     PRODUCTION 

4 'I'll  have  to  bring  you  a  four-foot-six  by 
seven-foot  by  tliree-foot-six  flask  for  this 
job." 

i 'Hold  on  a  minute — I'm  not  figuring  on 
making  two  of  those  to  the  flask.' 

"I  know  that,  but  we  don't  have  any 
smaller  flasks  handy  now — all  in  use.' 

"How  do  you  know?    Did  you  look?' 

"I  don't  have  to.  I  know  what  we  have 
in  the  yard.' 

"Well,  you  must  be  a  star  if  you  do;  for 
from  what  I  saw  of  your  fine  flask  yard,  it 
would  take  a  Philadelphia  lawyer  a  month 
of  Sundays  to  figure  it  out.' 

"What  is  it  to  you?  You  are  paid  to  make 
moulds — not  butt  in  about  the  flasks.  I'll 
attend  to  that  part.' 

"All  right,  Tony.  Go  as  far  as  you  like, 
but  get  the  flask  on  the  floor  so  it  will  look 
as  if  I  was  doing  something.  It's  a  good 
thing  for  me,  Eyan,  that  this  is  not  a  piece- 
work job,  for  if  this  is  a  sample  of  what  a 
man  has  to  put  up  with  I  would  earn  but 
little." 

Jennings,  at  a  call  from  the  moulder  next 
to  him,  goes  over  to  help  him  close  a  mould. 

"Lift  her  off,  Bill.  I  saw  some  sand  drop 
from  the  cope." 


SCIENTIFIC    FOUNDRY    MANAGEMENT  153 

"Just  what  I  expected.  It's  a  wonder  the 
whole  thing  did  not  fall  out.  The  cope  is  a 
dandv. ' ' 

v 

The  foreman  happens  along,  and,  noticing 
the  fall-out,  exclaims: 

"What  is  the  matter,  Bill!  Didn't  you 
ram  and  secure  that  cope  properly?' 

"I  did  the  best  I  could  with  it.  The  cope 
is  too  wobbly  to  hold  the  sand  as  it  should. ' 

"That's  right — blame  it  on  the  cope.  Why 
didn't  you  let  me  know  it  was  in  need  of  fix- 
ing, or  tell  Tony  to  have  the  flask  carpenter 
tighten  it  up  for  you?' 

"If  you  remember,  boss,  I  called  your  at- 
tention to  a  flask  the  other  day,  telling  you  it 
needed  fixing,  and  you  told  me  to  use  it ;  that 
it  was  plenty  good  enough  for  the  job.  I 
thought  this  time  I  would  make  no  kick.' 

"Well,  in  the  future  let  me  know  when  you 
think  things  are  not  right,  and  I'll  decide 
what  is  best  to  do.' 

"What  do  you  know  about  that,  Jennings? 
You  get  called  if  you  kick  and  you  get  it  if 
you  don't.  It's  hard  to  please." 

Tony  and  his  helper  bring  in  the  flask,  and, 
laying  his  bottom  board,  Jennings  starts  in. 

"Well,  Kyan,  we  are  under  way  at  last.  I 
want  to  mix  that  facing  you  fixed  for  me  a 


154  MAXIMUM     PRODUCTION 

little  better,  and  while  I'm  doing  it  yon  oil 
the  pattern.  It's  covered  with  dirt  and  dust. 
Here  comes  the  time  clerk  for  a  list  of  the 
daily  doings.' 

"'What  are  yon  doing  this  morning,  Jen- 
nings ? ' 

"  Trying  to  make  a  mould.  Think  I  was 
flying  an  airship!' 

"You  seem  to  be  up  in  the  air,  all  right. 
Yes,  it  looks  as  if  you  were  trying,  for  you 
haven't  got  very  far  with  the  job.' 

"I  won't  get  much  further  with  it,  either, 
if  you  make  any  more  such  cracks  as  that. 
I'd  gladly  take  a  round  out  of  you  and  quit 
the  place.  What  do  you  know  about  what 
is  going  on  here !  My  sand  was  not  right  in 
the  first  place ;  I  had  to  wait  for  a  job ;  then 
waited  for  a  flask,  so  I  can't  tell  you  just 
when  I  started.  I  don't  know  what  the  job  is, 
and  I  don't  care,  either." 

"Were  you  on  hand  at  seven  this  morn- 
ing?" 

"I  sure  was.' 

"Then  I'll  have  to  start  you  on  this  job 
from  that  time.  I'll  get  the  details  as  to  the 
job  from  the  foreman." 

"Go  ahead,  but  don't  come  around  in  a 
few  days  to  find  out  what  made  Jennings 


SCIENTIFIC    FOUNDRY     MANAGEMENT  155 

take  so  long  on  this  job.  IVe  lost  two  good 
hours  now  for  which  I  am  not  to  blame.' 

"All  right,  Jennings;  keep  your  shirt  on. 
Kicking  won't  help  things  much.' 

"You  never  said  a  truer  word  in  your  life. 
Kicking  seems  to  get  one  in  wrong  here  every 
time. ' 

As  the  timekeeper  goes  on  about  his  duties, 
Jennings  rams  his  drag  without  any  further 
delays.  When  nearly  finished  he  says  to  his 
helper : 

"Ryan,  I'll  soon  be  ready  to  roll  this  drag. 
Go  hunt  some  chains — half-inch  chains  will 
do — and  hurry  so  I  can  get  the  crane  before 
Wilson  wants  it.  If  I  can't  get  them  in  time 
there  will  be  another  private  communion  at 
the  expense  of  the  company.' 

Ryan  comes  back  in  a  few  minutes,  report- 
ing that  two  sets  are  in  use  and  that  the 
night  gang  broke  the  third  set  taking  out 
some  castings. 

"Get  some  heavier  ones,  then,  and  hurry. 
I'll  go  with  you." 

As  Jennings  and  Ryan  return  to  the  floor 
with  three-quarter-inch  chains,  they  see  Wil- 
son signal  the  crane  man. 

"It's  all  off,  Ryan.  No  lift  for  a  while. 
Oh,  well,  go  and  get  some  gaggers  for  me. 


156  MAXIMUM     PRODUCTION 

I'll  need  a  bunch  of  eight-inch  gaggers  for 
this  job.' 

One  of  the  moulders  happens  along  with 
the  remark: 

1  i  Hung  up,  are  you  ? ' ' 

"Yes,  waiting  for  that  crane." 

"You'll  get  used  to  that  if  you  stay  here 
long  enough.  I've  had  to  wait  as  long  as 
two  hours  for  it  when  a  number  of  gangs 
wanted  to  close  up  at  the  same  time." 

"Oh,  I  don't  mind  a  wait  now  and  then, 
but  it  seems  that  I've  been  having  more  than 
my  share  of  them  since  I  came  here.  If  I 
got  paid  for  the  work  I  do  and  not  the  waits, 
I'd  get  mighty  little.  I  may  be  fussy,  but  I 
like  to  keep  going." 

"What's  the  difference!  You  get  your 
pay,  don't  you?  If  they  don't  see  where  they 
are  losing  out,  it's  not  up  to  us  to  tell  them, 
is  it !  They  'd  make  us  turn  out  all  the  more 
and  we'd  get  nothing  extra  for  it.  Let 
well  enough  alone." 

Wilson  lifts  off,  and  calls  to  Jennings  to 
get  the  crane.  Jennings,  with  the  help  of 
Eyan,  rolls  the  drag  over  and  after  sizing 
up  the  job,  says: 

"Eyan,  go  and  have  the  flask  carpenter 
come  to  the  floor.  The  cope  needs  a  lot  of 


SCIENTIFIC    FOUNDRY    MANAGEMENT  157 

chucks  to  take  that  deep  lift,  and  a  couple 
of  bars  will  have  to  be  knocked  out  to  make 
room  for  those  large  bosses.' 

The  flask  carpenter  soon  appears  on  the 
scene,  and,  after  looking  the  job  over, 
says: 

" It's  a  shame  to  change  this  flask  over.  It 
was  made  for  a  special  job.  It's  too  large 
for  this  job,  anyway." 

"I  can't  help  that.  I  kicked  to  Tony  when 
he  brought  it  in,  but  he  told  me  to  mind  my 
own  business." 

"Why  didn't  you  ask  the  boss  for  another 
piece  to  put  in  with  this  one!' 

'  '  He  is  giving  out  the  work — I  'm  not. ' 

The  carpenter  chucks  the  cope,  knocks  out 
the  necessary  bars,  after  which  Jennings 
sings  out: 

"Two  up  for  a  lift!  (See  them  tumbling 
all  over  themselves  to  get  here,  Eyanf) 
Come  on,  just  two  needed  for  an  easy  lift! 
(Pine  crowd,  this — they  seem  so  anxious  to 
assist  each  other.)  Two  up — any  time  to- 
day will  do ! ' 

Just  then  the  foreman  comes  along,  and, 
noticing  the  work,  says: 

"I  don't  want  that  made  that  wav,  Jen- 

+t     7 

nings.    That  lift  is  too  deep  for  those  chucks. 


158  MAXIMUM     PRODUCTION 

We  had  an  arbor  made  for  this  job  and  I 
want  it  used.' 

"Well,  boss,  I  knew  nothing  about  an  ar- 
bor. You  didn't  tell  me  anything  about  it, 
nor  did  Tony  or  the  flask  carpenter.  It 
seemed  to  me  the  chucks  would  be  all  right, 
so  I  had  them  put  in.' 

"They  may  suit  you,  but  they  don't  suit 
me." 

"How  was  I  to  know  what  you  wanted? 
You  gave  me  the  job  and  told  me  to  have 
Tony  get  a  flask.  You  didn't  mention  an  ar- 
bor.' 

"No  more  chewing  about  it.  Have  the 
chucks  knocked  off  and  send  Eyan  after  the 
arbor.  It's  out  in  the  yard  somewhere.  Next 
time  you're  not  sure  of  a  thing,  don't  go 
ahead  until  you  have  asked  me  about  it.' 

"All  right." 

Jennings  knocks  off  the  chucks  himself  and 
a  little  later  Eyan  comes  along  with  the  in- 
teresting information  that  the  arbor  was 
broken  the  last  time  the  piece  was  made,  to 
which  Jennings  exclaims: 

"Well,  if  this  isn't  the  limit!  Does  any 
one  around  here  know  what  is  going  on!  I 
suppose  the  boss  will  tell  me  to  put  the 
chucks  back  on  again." 


SCIENTIFIC    FOUNDRY    MANAGEMENT  159 

Jennings  hunts  up  the  foreman  again,  and 
says: 

"I  can't  use  the  arbor,  boss.  It  was  broken 
the  last  time  the  piece  was  made.' 

6  i  That 's  a  fine  piece  of  business.  If  I  knew 
the  man  who  broke  it  without  reporting  it  to 
me,  I'd  fire  him  on  the  spot.  A  man  has  got 
to  be  in  a  dozen  places  at  once  to  keep  track 
of  what  is  going  on  here.  Have  the  carpen- 
ter put  the  chucks  back  on  again.  Hurry, 
too ;  it's  nearly  noon,  and  you  haven't  started 
to  ram  the  cope  yet. ' 

"No,  and  if  the  afternoon  is  going  to  be 
like  the  morning  has  been,  I  won't  get  the 
job  ready  for  a  week.' 

"Go  easy — accidents  will  happen.' 

Jennings  goes  back  to  his  floor  and  sends 
Eyan  after  the  flask  carpenter.  The  noon 
whistle  blows,  so  Jennings  proceeds  to  eat  his 
lunch,  after  which  he  joins  a  group  of  work- 
men. 

"Well,  stranger,"  one  asks,  "how  do  you 
like  it  as  far  as  you've  gone?' 

"From  what  I  have  seen  as  far  as  I  have 
gone,  I  can  tell  you  that  I  won't  go  very  far. 
I  'm  not  in  love  with  this  hop,  skip  and  a  jump 
business. ' 

"No?    You  must  be  one  of  them  'kill  the 


160  MAXIMUM  .  PRODUCTION 

job  guys.'    Perhaps  if  you'd  fix  it  up  they 
would  make  you  boss.' 

"Soft  pedal  on  the  sarcasm.  I'm  not  anx- 
ious to  be  boss,  nor  do  I  go  out  of  my  way  to 
show  off  how  much  I  can  do  in  a  day,  al- 
though I  can  go  some  if  it  is  necessary. ' 

"What  is  the  particular  brand  of  kick, 
then?  Liver  complaint,  grouch,  or  what!' 

"Neither.  I  simply  don't  like  this  way  of 
working.  It's  start,  then  wait;  start,  then 
wait  some  more ;  commence  again,  then  stop ; 
begin  all  over  again — and  you  have  the  gen- 
eral scheme  of  things  here,  as  far  as  I  have 
been  able  to  size  things  up.  Now,  this  may 
be  all  right  to  those  who  have  not  worked  in 
better  shops,  but  I  have;  and  the  difference 
is  something  you  don't  have  to  put  on  glasses 
to  see.' 

"Why  didn't  you  stay  in  them  shops, 
then?" 

"That's  none  of  your  business,  but  what  I 
said  goes,  just  the  same.' 

' '  Jennings  is  right, '  says  an  old  moulder 
standing  close  to  him.  "There  are  shops 
where  a  man  can  do  more  and  yet  work  no 
harder  than  we  do  here.  The  men  can  work 
to  better  advantage  because  they  are  given 
things  to  work  with ;  there  is  some  head  and 


SCIENTIFIC    FOUNDRY    MANAGEMENT  161 

tail  to  things ;  the  conditions  are  better — not 
this  rush  and  hustle  and  then  accomplish  lit- 
tle. There  is  no  use  in  kicking  though,  Jen- 
nings. We  couldn't  change  things  if  we 
wanted  to.  If  we  tried,  we'd  probably  lose 
our  jobs  for  trying  to  tell  them  where  they 
are  losing  out.' 

"Perhaps  you  are  right.  I  suppose  I'll 
get  used  to  it  in  time.' 

At  this  the  whistle  blows  and  Jennings 
goes  back  to  his  floor.  Ryan  and  the  flask 
carpenter  soon  appear,  the  chucks  are  placed 
back  in  the  cope,  and,  with  the  help  of  two 
others,  it  is  placed  in  position. 

"Now,  Ryan,  bring  me  some  facing  while  I 
sift,  and  step  lively.  .  .  .  That 's  enough ; 
now  bring  me  some  gaggers  .  .  .1  asked 
you  to  bring  me  some  8-inch  gaggers,  and  not 
10-inch  and  12-inch. " 

"I  got  all  I  could  find  of  the  8-inch 
kind. ' ' 

"Do  you  mean  to  tell  me  that  the  8-inch 
gaggers  that  you  brought  up  are  all  you  could 
find  ?  Where  do  they  keep  them  here  ? ' 

"In  some  racks  in  the  middle  of  the  shop 
and  on  the  back  end  of  the  floors.' 

"Well,  I'm  going  after  some.  What  you 
brought  is  not  enough,  anyway.' 


162  MAXIMUM     PRODUCTION 

A  little  later  Jennings  comes  back  to  his 
floor  with  his  hands  full  of  gaggers. 

4 'Oh,  but  this  is  a  swell  place.  The  rack 
looks  as  if  a  cyclone  struck  it — gaggers  mixed 
up  in  every  possible  fashion.  I  wouldn't  paw 
over  that  bunch  if  I  lost  my  job.  What  I  got 
I  coaxed  from  the  men  and  they  didn't  seem 
any  too  willing  to  let  me  have  them,  at  that. ' 

Jennings  now  tells  Eyan  to  get  him  some 
18-inch  gaggers  for  the  deep  lift.  Eyan 
comes  back  in  a  few  minutes  with  the  state- 
ment that  he  couldn't  find  any. 

"Say,  boss,"  as  the  foreman  comes  along, 
"I  need  some  18-inch  gaggers,  and  the  helper 
says  that  he  can't  find  any.' 

"There  should  be  some  around  somewhere. 
We  often  use  them.' 

"Where  are  they,  then!  I  was  down  to 
the  rack  a  short  time  ago  and  don't  remem- 
ber seeing  any  18  inches  long.' 

"I  don't  know  just  where  they  are.  Do 
you  suppose  for  a  minute  that  I  have  nothing 
else  to  do  but  keep  track  of  gaggers!' 

"Do  you  think  it's  up  to  me  to  look  for 
them!  I'm  willing  to  set  gaggers  and  make 
moulds,  but  I  don't  see  where  the  company 
gets  any  good  out  of  me  when  I  chase  after 
gaggers." 


SCIENTIFIC    FOUNDRY    MANAGEMENT  163 

' 'If  you  think  I'm  going  to  look  for  them 
for  you,  you  have  another  guess  coming. 
Send  your  helper  for  them.' 

"He  says  that  there  is  none  at  the  racks. 
No  use  sending  him  among  the  men,  for  after 
the  swell  reception  I  got  from  some  of  them 
when  I  went  after  some  8-inch  gaggers  he'd 
stand  a  fine  show  of  getting  what  I  need  for 
this  lift," 

' '  Go  get  them  yourself,  then,  and  quit  your 
kicking.  You  have  done  nothing  but  howl  and 
fume  ever  since  you've  been  on  the  job.  If 
you  don't  like  the  way  I  run  this  proposition, 
you  had  better  quit." 

Jennings  is  about  to  tell  the  foreman  what 
he  thinks  of  things,  but  decides  not  to  do  so. 
Going  to  the  floor  next  to  him,  he  says : 

"Got  any  18-inch  gaggers,  Bill?" 

"No,  but  I  guess  Flanders  will  let  you  have 
some.  He  had  a  few  yesterday." 

"Looking  for  18-inch  hooks,  Flanders.  Can 
you  spare  any?" 

"Had  some  yesterday,  but  some  kind  friend 
relieved  me  of  them.  Come  again.' 

"Where  do  you  suppose  I  could  find 
some?" 

"Ask  Dr.  Cook.  He  might  discover  'em. 
Or,  try  the  racks." 


164  MAXIMUM     PRODUCTION 

Going  to  the  rack  where  the  gaggers  are 
kept,  Jennings  asks  where  the  18-inch  gag- 
gers are.  On  being  informed  that  Peters  on 
the  cylinder  floor  has  some,  Jennings  goes  on 
his  way  until  he  arrives  on  the  floor  men- 
tioned. 

"Can  I  have  some  of  those  18-inch  gaggers 
I  see  on  the  back  of  your  floor  1 ' 

"You  can — not.' 

1  i  Why  not  I    You  are  not  using  them. ' 

* '  That 's  got  nothing  to  do  with  it.  I  've  got 
a  job  that  will  take  that  size  and  I'll  need 
them.  I  got  called  right  by  the  boss  yester- 
day for  not  keeping  what  I  had,  and  if  any 
one  in  this  shop  gets  those  gaggers  from  me 
they  will  have  to  go  some,  let  me  tell  you 
that." 

"Well,  where  in  Sam  Hill  will  I  find  some? 
I'm  getting  corns  on  my  feet  chasing  around 
for  a  few  gaggers.' 

"You  had  better  see  the  blacksmith.  He 
can  get  some  out  for  you  quicker  than  you 
can  find  them  around  here. ' 

"That's  a  good  suggestion.  I'll  try  it. 
Where  does  he  hold  out?" 

"At  the  lower  end  of  the  shop,  next  to  the 
air  furnace.' 

Jennings  locates  the  blacksmith  and  says: 


SCIENTIFIC    FOUNDRY    MANAGEMENT  165 

"  Could  you  cut  and  bend  me  some  18-inch 
gaggers  ! ' 

"I  couldn't  just  now.  I'm  making  some 
new  sand  hooks  for  the  night  gang.' 

"Ah,  be  reasonable.  I've  been  called  down 
by  the  boss  because  I  mentioned  gaggers,  and 
I've  been  to  three  floors  in  an  attempt  to  find 
some  and  got  left  each  time.  Stretch  a  point 
and  get  me  out  a  few,  if  you  can.' 

"How  many  .do  you  want!' 

"Oh,  about  25  will  be  enough,  I  guess.' 

"All  right,  I'll  give  you  a  lift." 

A  little  later  Jennings  goes  to  his  floor  with 
a  supply  of  18-inch  gaggers  and  in  a  few 
moments  has  them  set. 

"Now,  Eyan,  get  busy  and  shovel  in  as 
fast  as  you  can.  I  want  to  get  this  cope 
rammed  up  as  quickly  as  possible.  Perhaps 
I  can  make  up  a  little  of  the  lost  time.' 

Eyan  shovels  sand,  Jennings  rams  and 
finally  the  cope  is  in  readiness  to  lift  off.  He 
gets  the  crane  without  much  delay  and  is  soon 
at  work  finishing  the  mould. 

"What's  going  to  happen,  Eyan!  No  de- 
lays for  some  little  time.  I  don't  mind  an 
occasional  loaf,  but  I  do  hate  them  as  a  steady 
diet." 

"The  day  is  not  over  yet,  Jennings.' 


166  MAXIMUM     PRODUCTION 

Jennings  finishes  as  much  as  he  can  of  the 
cope,  and  is  about  to  draw  the  pattern,  when 
he  notices  two  dowel-pin  holes  in  one  end  of 
the  pattern. 

"It  don't  look  good  to  me,  Ryan.  I  didn't 
notice  them  before,  but  those  holes  mean 
something.  Go  find  the  boss." 

When  the  foreman  arrives,  Jennings  shows 
him  the  pin  holes. 

"Well,  Jennings,  I  see  you  are  in  wrong 
again.  Don't  you  know  that  dowel-pin  holes 
are  put  in  a  pattern  in  order  to  attach  an- 
other piece  to  it  1  There  is  a  lip  that  goes  on 
that  pattern  and  I  don't  see  it  in  the  cope." 

"You  gave  me  the  pattern  yourself,  boss, 
and  there  was  no  extra  pieces  with  it.  I 
didn't  notice  the  holes  before." 

* '  That 's  right — try  and  blame  it  on  to  me. 
You  should  have  noticed  the  holes.  You  are 
paid  to  think  and  notice  things,  as  well  as 
mould,  you  know. ' 

"Am  I  supposed  to  check  up  the  pattern 
shop?  They  should  have  assembled  the  pat- 
tern properly  before  allowing  it  to  go  into 
the  foundry.  Where  I  worked  last  the  pat- 
terns were  right  before  the  work  was  started, 
and  the  moulder  didn't  have  to  bother  to  see 
if  the  parts  were  together." 


SCIENTIFIC    FOUNDRY    MANAGEMENT  107 

.  "Yes,  the  pattern  shop  is  partly  to  blame, 
but  I  still  don't  see  where  that  lets  you  out. 
At  any  rate,  get  the  piece,  cut  into  the  cope, 
set  the  piece  and  ram  over  it.' 

Jennings  goes  to  the  pattern  house,  gets 
the  missing  piece  and  after  a  half-hour's 
work  gets  the  cope  in  shape  once  more.  He 
then  draws  the  pattern  from  the  drag,  and 
while  finishing  tells  Eyan  to  go  after  the 
cores.  Ryan  comes  back  with  the  statement : 

"They  are  not  ready  yet.  The  boss  says 
they  have  been  so  busy  they  could  not  get 
them  made  this  morning.  He  says  he  will 
make  them  now.' 

' '  What  good  will  that  do  me  ?  I  '11  be  ready 
to  core  up  in  about  ten  minutes.  I  guess  it's 
nix  on  finishing  this  to-day." 

The  boss  comes  along  at  this,  with  the  re- 
mark: "You  will  have  to  hurry,  Jennings,  if 
you  want  to  get  that  in  the  heat  to-day.  The 
blast  is  on  now.' 

"You  won't  get  it  to-day,  boss.  No  cores 
for  the  job.  Core  room  too  busy.' 

"I  told  Jenkins  to  be  sure  and  get  those 
cores  in  so  that  you  would  have  them  in  time. 
A  nice  state  of  affairs.  I'll  find  out  why.' 

The  foreman  goes  to  the  core  room,  and, 
stepping  up  to  the  core  boss,  says: 


168  MAXIMUM     PRODUCTION 

"Say,  Jenkins,  why  didn't  you  get  those 
cores  for  Jennings,  as  I  told  you  this  morn- 
ing! He  is  ready  to  core  up,  and  he  tells  me 
they  are  not  made.  I  gave  you  plenty  of 
time. ' 

'  *  Yes,  you  told  me  about  them,  and  ten  min- 
utes later  you  come  and  tell  me  to  get  out  the 
cores  for  the  Wilkins  engine  contract  as  fast 
as  I  could. " 

"I  know  I  did,  but  the  few  cores  for  Jen- 
nings would  not  have  taken  long." 

"Perhaps  not ;  but  you  said  that  the  engine 
cores  were  to  take  preference  over  all  others, 
and  I  acted  accordingly.  I'm  making  the 
cores  now  for  Jennings,  but  they  must  be 
dried  before  he  can  have  them." 

Going  back  to  Jennings '  floor,  he  remarks : 
"Finish  your  drag,  and  then  go  and  help 
Potter  close  his  mould.  The  cores  won't  be 
ready  for  you  to-day." 

Jennings  finishes  the  drag  as  instructed, 
after  which  he  reports  on  Potter's  floor. 

"Well,  what  do  you  want  here?" 

"The  boss  sent  me  over  to  help  you  close. 
I  can 't  finish  my  job.  No  cores. ' ' 

"I  don't  need  any  help.  I  can  close  this 
alone.  The  boss  knows  this,  for  I  have  made 
enough  of  these  castings." 


SCIENTIFIC    FOUNDRY    MANAGEMENT  1G9 

"Well,  will  I  go  and  tell  him  you  don't 
want  me?" 

"No;  stay  on  the  floor,  as  long  as  he  sent 
you.  It  means  that  unnecessary  time  will  be 
charged  against  this  job,  though/ 

"Yes,  Potter,  I  can  see  that  it  was  not 
necessary  to  send  me  over  here,  but  I  sup- 
pose that  he  was  too  busy  to  look  up  another 
job  for  me.  What  do  you  want  me  to  do!' 

"There  isn't  much  you  can  do.  It's  ready 
to  close  now.  You  can  make  the  runner  while 
I  get  wedges  and  clamps  and  clamp  up.  Then 
we  will  put  on  a  few  weights  and  we're  ready 
for  the  iron.  I  could  do  the  work  myself  in 
time  for  the  metal,  but  I  guess  we  can  make 
it  last  the  day  out.' 

Between  them  they  close  the  mould,  make 
the  runner,  clamp  and  weight,  after  which 
they  proceed  to  the  back  end  of  the  floor,  light 
their  pipes  and  discuss  things  in  general. 
About  a  half  hour  later  their  iron  comes,  the 
piece  is  poured  and  the  men  go  home,  Potter 
satisfied  that  he  has  done  a  good  day's  work, 
Jennings  feeling  rather  disgusted  over  the 
happenings  of  the  day. 

The  next  morning  Jennings  is  on  hand 
ready  to  finish  his  mould.  He  goes  to  the 
core  boss  with  the  remark : 


170  MAXIMUM     PRODUCTION 

"Are  my  cores  ready?' 

* l  Yes ;  but  we  have  not  drawn  the  carriage 
from  the  oven  yet.  As  soon  as  we  do  this  I'll 
get  your  cores,  have  them  pasted  and  black- 
ened and  send  them  up  to  you.' 

"All  right,  but  hurry,  as  I  want  to  get  the 
job  finished.' 

Jennings  goes  back  to  his  floor,  and  in 
about  twenty  minutes  the  cores  are  brought 
up  to  him.  He  sails  in,  sets  the  cores,  then 
secures  his  work,  after  which  he  sends  Eyan 
after  four  42-inch  clamps.  Jennings  makes 
his  runner,  then  waits  for  Eyan  to  bring  him 
the  clamps.  While  leaning  against  his  flask, 
the  foreman  appears.  He  watches  Jennings 
a  moment,  and  then  says : 

"Well,  what  are  you  waiting  for,  Jen- 
nings 1 ' ' 

"I've  sent  Eyan  after  some  42-inch  clamps 
and  he  has  not  returned  with  them. ' 

"Perhaps  he  is  loafing  on  the  job.  You 
had  better  see  where  he  is.' 

' '  He  is  probably  chasing  all  over  the  place, 
the  same  as  I  did  yesterday  when  I  was  look- 
ing for  18-inch  gaggers.  Clamps  and  gag- 
gers  ought  to  be  where  they  could  be  got  at 
easily. ' 

"That's   right,   start  kicking  bright   and 


SCIENTIFIC    FOUNDRY    MANAGEMENT  171 

early,  the  same  as  you  did  yesterday.  The 
next  thing  I  know  you  will  want  me  to  have 
things  manufactured  to  order  for  you;  lay 
everything  at  your  feet  and  say,  'Mr.  Jen- 
nings, there  you  are ;  now  go  ahead. '  Would 
that  suit?" 

"The  fact  is,  boss,  if  things  had  been  in 
better  shape  yesterday,  this  job  would  now 
be  on  the  cleaning  floor.  I  can't  make  moulds 
and  do  other  things  at  the  same  time.  If  you 
want  me  to  be  a  combination  moulder  and 
laborer,  that's  up  to  you.  Don't  come 
around,  though,  and  tell  me  that  I'm  taking 
too  long  on  a  job.' 

"I'll  tell  you  what  I  please  about  your 
work.  You  are  no  better  than  any  one  else 
around  here.  They  all  have  to  dig  in  and 
help  themselves,  and  you  can  do  the  same. 
If  you  are  going  to  do  chronic  kicking,  the 
sooner  we  part  company  the  better  it  will  be 
for  both  of  us.' 

At  this  Jennings  explodes. 

"You've  said  it  right.  You  can  have  your 
job.  Perhaps  you  can  find  some  one  who 
don't  know  how  a  shop  should  be  run — some 
easy  mark  who  is  content  to  chase  around 
half  his  time,  doing  what  should  be  done  in 
advance  and  '  getting  his '  regular  because  he 


172  MAXIMUM     PRODUCTION 

does  not  turn  out  more.  Nothing  like  that 
for  mine.7 

"All  right;  I'm  satisfied,  Jennings.  You're 
too  high  and  mighty  for  me.  If  you  stay 
here  you  would  probably  be  running  the  shop 
in  a  short  time.' 

"No,  I'm  not  crazy  to  run  the  place;  but  in 
parting  I  might  tell  you  that  it  can  be  run  a 
heap  better  than  it  is  being  operated  now. 
Take  that  from  one  who  knows.' 

TIME  ANALYSIS  (IN  HOURS  AND  MINUTES)  OF  WORK  MADE  BY  JENNINGS 
Italics  indicate  standardized  moulding  operations. 

Column  1 — Standard  time  allowed  standard  moulding  operations. 
Column  2 — Actual  time  by  Jennings  against  these  standards. 
Column  3 — Time  in  trips  made  by  Jennings. 
Column  4 — Time  in  discussions. 
Column  5 — Time  in  waits  and  delays. 
Column  6 — Time  in  unnecessary  work. 

Items.  Elapsed  Time  Distribution. 

Time        123456 
1 — Observing  sand  heap  and 

calling  attention  of  fore- 
man to  same 3  1       — 

2 — Removing    gaggera    from 

sand,  cutting  over,  tem- 
pering, etc 25  25 

3 — Hunting  up  foreman  for 

work  and  trip  with  him  to 

the  office 7  7 

4 — Trip    to    pattern    house 

with  the  foreman 4  —     ,4 

5 — Getting  out  the  pattern .  .          6  fi 

6 — Trip  back  to  the  floor. ...          4  4 

7 — Sizing     up     pattern     for 

flask  and  discussion  with 

Ryan    with    reference    to 

finding  Tony 3  3 

8— Conversing    with    "Bill" 

while  Ryan  is  looking  up 

Tony 5  5 

9 — Waiting  for  Tony  to  come 

in   and    measure   up    the 

work 10  10 

10 — Waiting  for  the  flask  to 

be  brought  in 11 

Carried  forward  .  1:18  15         2         33       28 


SCIENTIFIC    FOUNDRY    MANAGEMENT 


173 


Items. 


Elapsed 
Time. 


1:18         —         — 


Brought  forward 

11 — Laying  bottom  board,  pat- 
tern and  drag 2 

12 — Remixing  the  facing  sand         4 
13 — Discussion   between  Jen- 
nings and  the  time  clerk. .          3 

14 — Ramming  the  drag 2:  31 

15 — Going  for  chains 4 

16 — Waiting  on  crane  to  roll 

drag 8 

17 — Rolling  the  drag 3 

18 — Waiting  for  the  flask  car- 
penter    5 

19 — Waiting   for   cope   to   be 

chucked  and  bars  cut  out       14 
20 — Waiting  for  two  men  to 

assist  in  placing  the  cope .         4 
21 — Discussion  between  Jen- 
nings and  foreman  as  re- 
gards  chucking   cope  in- 
stead of  using  arbor 3 

22 — Knocking  out  chucks.  ...          2 
23 — Waiting     for     Ryan     to 

bring  in  the  arbor 

24 — Advising   foreman   as   to 

broken  arbor 

25 — Trip  back  to  floor,  send- 
ing Ryan  for  the  flask 
carpenter  and  waiting  un- 
til noon 

26 — Waiting  for  flask  carpen- 
ter after  whistle  blows ...          3 
27 — Rechucking  the  cope ....          8 
28 — Placing  the  cope 3 

29 — Sifting   facing    sand    over 

the  pattern 2 

30 — Going  to  racks  for  gag- 
gers  and  getting  small 
gaggers  from  the  men. ...  9 

31 — Setting  these  gaggers 15 

32 — Discussion  with  foreman 
with  reference  to  the  18- 
inch  gaggers 

33— Trip  to  "Bill"  Flanders 
and  cylinder  floor  for  the 

large  gaggers 

34 — Trip  to  blacksmith  and 
waiting  until  some  are 

made 12 

35 — Trip  back  to  floor 3 

36 — Setting  the  18-inch  gaggers         5 
37 — Shovelling  sand  into  cope  .          6 

38 — Ramming  cope .  .  . 24 

39 — Lifting  off  cope  and  plac- 
ing for  finishing 3 

40 — Finishing  cope  previous  to 

noting  dowel-pin  holes 10 


Time  Distribution. 

34  56 

15         2          33      28 


2  2         —       —         —       — 

—         3         —       — 
2:10     2:31 


_         _         _       _  8       — 

3  3         —       —         —       — 

—         —         —       —  5       — 


—       —         14       — 


2         

2 


9         —         — 
3         —         — 


7         —         — 


—       —  9       — 


3       —         —       — 


3       —            4  — 

_         _         _       _           3  — 

8  — 

—         —         —       —         —  3 


12 


15 


2         —         — 


6         — 


2         

6       —         — 


2—10 
3       —         — 


5 

5 

20 

3 

8 


5 

6 

24 

3 
10 


Carried  forward  .          ...     5:51     3:10       3:41         45       10      1:38      37 


174  MAXIMUM     PRODUCTION 

Items.  Elapsed  Time  Distribution. 

Time.        123456 

Brought  forward 5:51      3:10      3:41         45       10     1:38       37 

41 — Waiting  for  foreman  after 

noting  holes 3  3 

42 — Discussion  with  foreman 

as  to  these  holes 3  3 

43 — Trip  to  pattern  house  for 

the  missing  part 4  4       — 

44 — Search  for  the  piece 4  4 

45 — Trip  back  t9  the  floor. ...          3  3 

46 — Placing      piece,      cutting 

space,    setting   cope   and 

ramming  over  piece 8  8 

47 — Lifting  off  cope 2 

48 — Finishing  the  cope 10  7         10 

49 — Drawing  pattern  from  drag         444 

50 — Finishing  drag 1:10     1 :  00     1 :  10 

51 — Discussion  with  foreman 

as    to    cores    not    being 

ready 4  4     — 

52 — Trip   to   core  room  next 

morning 5  5       — 

53 — Trip  back  to  floor 6  6       — 

54 — Waiting  for  cores 10  10 

55 — Setting  cores  and  securing 

them 1:54     1:40      1:54 

56 — Closing  mould 10  8         10 

57 — Waiting  for  clamps,  and 

discussion   with   foreman 

which  results  in  Jennings 

deciding  to  quit 16  5         11       — 

58 — Making  runner  and  clamp- 
ing         12          10         12 


Totals 11:39    6:19     7:21     1:03       22     2:06       47 

Percentages 100     63       8.6     3.4     18.1     6.9 

Stories  are  written,  plays  staged,  sermons 
preached,  in  order  to  drive  home  a  lesson  of 
some  kind.  So  with  the  foregoing — not  writ- 
ten for  the  purpose  of  indulging  in  a  lot  of 
destructive  criticism,  but  with  a  desire  to 
show  as  forcibly  as  possible  the  weaknesses 
of  ordinary  practice,  in  order  that  suggested 
betterments  may  be  better  appreciated  and 
consideration  be  given  to  what  "  scientific 
management"  means  to  the  foundry  industry. 


SCIENTIFIC    FOUNDRY    MANAGEMENT  175 

What,  then,  are  the  lessons  that  a  study 
of  the  story  discloses?  I  know  of  no  better 
way  of  pointing  them  out  than  by  putting 
down,  in  a  systematic  manner,  a  careful  time 
analysis  of  the  work  done  by  Jennings,  as 
shown  by  the  accompanying  time-analysis. 
From  these  figures,  which  are  valuable  in 
proportion  to  the  study  that  is  applied  to 
them,  we  find  that  the  job  was  standardized 
as  one  which  should  have  been  completed  in 
6 :19  hours,  and  that  11 :39  hours  were  actu- 
ally spent  in  making  the  casting.  Conse- 
quently, the  ratio  of  actual  performance  to 
possible  attainment  is : 

Standard   Moulding   Time,      6:19 
Actual      Moulding     Time,    11:39 
An  efficiency  of  54.3  per  cent,  which  means 
that  45.7  per  cent  of  the  time  is  inefficiency  or 
waste  (100  per  cent — 54.3  per  cent). 

This  leads  us  to  two  conclusions :  1,  that 
a  man  should  be  able  to  spend  more  time  in 
productive  endeavor  than  the  figures  indi- 
cate, or  something  is  decidedly  wrong;  and 
2,  that  the  inefficiencies  should  be  rigidly  in- 
vestigated and  eliminated  as  rapidly  as  pos- 
sible. The  problem  is  therefore  to  arrange 
the  factors  so  that  proper  consideration  can 
be  given  to  (2)  in  an  endeavor  to  better  (1). 


176  MAXIMUM     PRODUCTION 

In  order  to  deal  fairly  with  the  man,  we 
must  consider  the  inefficiency  of  the  man  as 
distinct  from  that  of  the  management.  The 
time  spent  by  Jennings  against  the  standard 
of  6:19  was  really  7:21;  consequently,  his 
efficiency  is  86.3  per  cent  (6:19-^7:21)  and 
his  inefficiency  1.02  hours,  or  13.7  per  cent  of 
the  actual  time  against  the  standard  mould- 
ing operations — distinctly  a  man  inefficiency. 
If,  however,  a  moulder  spends  0.25  hours  get- 
ting his  sand  in  condition  before  he  can  be- 
gin work,  this  is  an  inefficiency  due  to  poor 
shop  conditions.  If  he  waits  0.50  for  a  job, 
pattern,  and  flask,  this  is  an  inefficiency  due 
to  faulty  planning,  for  both  of  ivhich  the  man- 
agement of  the  foundry  is  responsible.  Ar- 
ranging the  time  factors  from  the  analysis, 
with  these  points  in  mind,  we  have : 

Hours.  Per  cent. 

1 — Standard  moulding  operations — Items  11,  14,  17,  29,  31, 

36,  37,  38,  39,  40,  48,  49,  50,  55,  56  and  58 6:19     54.3 

2 — Inefficiencies  due  to  poor  shop  conditions — Items  1,  2,  12, 
13,  15,  16,  20,  30,  32,  33,  34,  35,  41,  42,  43,  44,  45,  46, 
47  and  57 2:06     18.1 

3 — Inefficiencies  due  to  faulty  planning — Items  3,  4,  5,  6,  7, 
8,  9,  10,  18,  19,  21,  22,  23,  24,  25,  26,  27,  28,  51,  52, 
53,54 2:12  19.0 

4 — Inefficiency  of  the  moulder 1 :  02       8.6 


Totals 11:39  100.0 

If  we  call  the  above  inefficiency  100  per 
cent  we  will  have  the  following: 

Hours.  Per  cent.    Per  cent. 
Inefficiencies  due  to  poor  shop  conditions ....     2 :  06         39 . 6      | 

Inefficiencies  due  to  faulty  planning 2:12         41.5      >•     81.1 

Inefficiency  due  to  the  man 1 :  02         18.9      \ 

Total.  5:20       100.0 


SCIENTIFIC     FOUNDRY     MANAGEMENT  177 

It  follows  from  the  above  that  through  the 
elimination  of  the  inefficiencies  listed  we 
would  see  the  standard  attained,  so  it  is  but 
natural  to  ask  what  this  would  mean  in  the 
way  of  results.  The  following  summary  of 
production  and  costs  will  show  this  aspect 
of  the  case  clearly: 

As  TO  PRODUCTION: 

1 — If  casting  weighed  850  lb.,  the  production 
per  man  per  day  for  the  11.6  hours  actual 

time  would  be 732  lb. 

2 — If  same  casting  had  been  produced  in  6.3 
hours  (standard  time),  production  per 
man  per  day  would  have  been 1,349  lb. 


3 — Increase  in  productivity  would  have  been .      617  lb.  or  84.3  per  cent. 

As  TO  COST: 

1 — Casting  made  in  11.6  hours  would  cost  at 
40  cents  per  hour  for  Jennings  and 
20  cents  per  hour  for  the  helper,  with  a 

burden  of  100  per  cent $13 . 92 

2 — If  casting  had  been  made  in  6.3  hours,  cost 

at  the  same  rates  would  have  been .  ,  7 . 56 


3 — Reduction  in  cost $6 . 36  or  45.7  per  cent. 

If,  therefore,  Jennings  had  been  able  to 
produce  the  850-pound  casting  in  the  6.3 
hours,  not  only  would  his  productivity  have 
been  increased  and  the  cost  decreased  as  indi- 
cated, but  the  inefficiency  in  time  (5.3  hours) 
could  have  been  utilized  in  turning  out  more 
production — a  clear  gain — for  using  the  same 
ratio  per  hour  (134.9  pounds)  this  saved 
time  would  have  meant  715  pounds  in  addi- 
tional tonnage  or  $21.45  in  sales  at  $3.00  per 
100  pounds. 


178  MAXIMUM     PRODUCTION 

While  not  acknowledging  that  this  is  in 
any  way  an  isolated  case,  if  it  is  possible  to 
accomplish  one-half  of  the  results  outlined, 
through  "scientific  management/  then  the 
thing  to  do  is  to  get  down  to  "brass  tacks' 
and  cut  out  the  unscientific  features.  How? 

1-  -Through  a  study  and  application  of  the 
efficiency  principles  that  have  been  so  con- 
vincingly defined  by  Harrington  Emerson,  in 
his  recent  series  in  The  Engineering  Maga- 


zine.* 


2 — Through  a  systematic  planning  and 
dispatching  of  all  work  along  the  lines  indi- 
cated in  Chapter  II. 

3 — Through  a  close  study  of  the  shop  con- 
ditions in  order  that  the  delays  due  to  this 
feature,  contributing  to  inefficiency,  may  be 
eliminated  or  at  least  reduced  to  a  minimum. 

4-  -Through  a  careful  and  scientific  study 
of  all  operations,  in  order  that  standards  as 
to  time  may  be  determined  which  will  not 
only  serve  to  reveal  the  weaknesses  in  the 
conduct  of  the  business  but  as  the  basis  for 
reward  for  personal  effort. 

5 — Through  bonus  reward  to  those  who 
endeavor  to  take  advantage  of  bettered  con- 

*  "The  Twelve  Principles  of  Efficiency";  The  Engi- 
neering Magazine,  May,  1910-September,  1911.  Now  re- 
published  in  book  form. 


SCIENTIFIC     FOrXDKY      MAXA(M-:M  KNT  179 

ditions  and  efficient  planning,  in  proportion 
to  their  assistance  in  eliminating  inefficiency. 
Scientific  management?  By  all  means,  for 
it  contributes  to  the  betterment  of  efficiency; 
it  aids  in  the  attainment  of  an  ideal;  the 
profitable  conduct  of  any  undertaking,  what- 
ever it  may  be. 


CHAPTER  IX 

FOUNDRY    ORGANIZATION   AND    MANAGE- 
MENT 

A  FOUNDBY  enterprise,  considered  as  an 
2  \.  organization,  is  in  many  respects  like 
a  chain,  the  strength  of  which  is  meas- 
ured by  its  weakest  link ;  and  until  the  profit- 
eating  elements — the  inefficiencies — are  dis- 
covered and  eliminated,  it  cannot  be  expected 
to  perform  the  impossible  task  of  producing 
the  results  anticipated  by  its  founders,  any 
more  than  a  chain  can  lift  ten  tons  if  one  of 
the  links,  because  of  its  weakness,  is  only 
strong  enough  to  lift  seven  tons.  To 
strengthen  the  links  of  a  business — to  make 
them  work  under  a  greater  load — is  the  task 
which  confronts  every  ambitious  executive, 
and  it  cannot  be  done  by  concentrating  atten- 
tion on  one  link  or  a  few  links ;  all  links  must 
receive  their  proper  consideration. 

The  demand  of  the  times  is  increased  earn- 
ings; this  involves  a  search  for  latent  earning 
capacity — a  search  in  every  nook  and  corner 
for  opportunities  to  better  results,  whether 

180 


FOUNDRY     ORGANIZATION  181 

good  or  bad ;  and  this  searching  process  must 
not  be  a  haphazard,  occasional,  half-hearted 
affair,  but  a  critical,  systematized  analysis 
all  along  the  line.  ' '  Chemistry  of  results ' '  is 
of  vital  importance,  just*  as  important  to  the 
success  of  the  foundry  as  a  business  as 
"chemistry  of  iron' '  is  to  the  melting  opera- 
tion as  a  single  department  of  the  business, 
for  it  considers  the  important  fact  that  pro- 
ductivity is  the  essential  factor  in  the  success 
of  any  foundry  enterprise  applicable  to  the 
methods  in  use,  the  clerks,  the  machines,  the 
cupola,  the  cleaning  room,  as  well  as  to  the 
moulders  and  coremakers.  Even  a  trifle  of 
increase  at  each  point  will  certainly  result  in 
greater  earnings,  for  the  little  things,  which 
are  oftentimes  overlooked  because  they  are 
little,  amount  to  something  substantial  in  the 
aggregate. 

Analysis,  important  as  it  is,  is  a  post-mor- 
tem, a  tearing-to-pieces-looking-for-trouble 
process,  and  while  it  is  an  important  element 
in  pointing  out  the  way  to  correct  existing 
evils,  it  is  just  as  necessary,  as  was  pointed 
out  in  a  previous  chapter,  to  have  at  work  an 
ante-mortem  process — a  process  anticipative 
in  nature — a  creative  and  constructive  force 
— a  force  which  considers  that  all  work,  while 


182  MAXIMUM     PRODUCTION 

distinct,  must  be  subservient  to  a  general 
scheme  of  things,  which  admits  of  something 
being  done  with  regard  to  its  relation  to 
other  things — ' '  organization ' '  in  other  words, 
applicable  to  the  business  in  its  entirety,  to 
the  various  departments,  to  the  clerical  work, 
etc.,  and  definable  as  follows : 

"The  result  of  a  resolving  of  the  forces  at 
work  into  their  component  parts;  their  clas- 
sification so  as  to  enable  them  to  follow  well- 
defined  channels,  that  the  work  may  be  guided 
along  the  most  logical  lines  and  responsi- 
bility placed  where  it  properly  belongs ;  and 
finally  their  combination  into  one  harmonious 
effort,  supervised  and  directed  by  a  master 
mind. ' 

A  customer  ordering  castings  will  specify 
a  certain  analysis  of  the  iron.  He  will  want 
a  certain  percentage  of  silicon,  sulphur,  man- 
ganese, etc.,  and  it  is  up  to  the  foundry  su- 
perintendent so  to  plan  his  work  as  to  pro- 
duce castings  which,  when  chemically  ana- 
lyzed, will  show  how  they  fulfil  the  specifica- 
tion. In  conducting  your  business,  you  spec- 
ify a  certain  analysis — profits;  perhaps  you 
specify  the  margin  of  profit  that  you  require 
your  final  analysis  to  reveal  to  you,  and  you 
must  organize  your  business  so  that  this  final 


FOUNDRY     ORGANIZATION  183 

analysis  will  either  come  up  to  your  desires 
or  show  you  what  was  wrong  in  order  for 
you  to  introduce  the  elements  necessary  to 
bring  about  the  results  you  specified.  There 
is  no  more  excuse  for  a  lack  of  organized 
effort  in  the  foundry  business  than  there 
would  be  for  a  foundryrnan  to  dump  his 
different  brands  of  pig  iron,  scrap  irons,  etc., 
onto  one  common  pile. 

An  accounting  arrangement,  no  matter 
how  carefully  planned  and  installed,  can  only 
register  results,  not  produce  them,  but  this 
does  not  mean  that  the  accounting  should  be 
considered  as  of  little  or  secondary  impor- 
tance ;  in  fact,  the  forces  which  register  or 
record  the  results,  as  well  as  those  which 
produce  them,  must  be  well  organized  if 
maximum  efficiency  is  to  be  the  outcome. 
Let  us  therefore  take  up  the  matter  of  or- 
ganization, first  as  applied  to  the  account- 
ing and  then  to  the  engineering  branches, 
by  briefly  considering  the  following  ques- 
tions : 

1- -Should  the  cost  accounting  be  consid- 
ered a  part  of  the  general  accounting  or  be 
kept  separate  from  it? 

2 — Should  the  accounting  be  on  the  basis 
of  monthly,  quarterly,  or  yearly  results? 


184  MAXIMUM     PRODUCTION 

3 — Should  the  inventory  be  a  perpetual  or 
continuous  one  or  taken  at  regular  periods 
for  closing  the  books? 

4 — Can  mechanical  aids  be  employed  to 
advantage  1 

5-  -What  may  be  expected  from  an  efficient 
accounting  arrangement  ? 

One  of  the  basic  principles  about  which 
a  system  of  foundry  accounting  should  be 
built,  is  that  it  should  consider  the  important 
fact  that  business  as  it  is  now  conducted  is 
nothing  more  or  less  than  a  conversion  of  as- 
sets from  one  form  into  another.  A  foun- 
dryman  starts  with  cash  in  the  bank,  which 
he  converts  into  labor  and  material.  From 
this  expenditure  he  secures  castings,  which, 
when  sold,  appear  as  accounts  receivable, 
then  as  cash,  as  payments  are  made,  and 
back  into  labor  and  material  again,  from  one 
state  into  another,  in  the  form  of  a  complete 
circle. 

From  this  point  of  view,  a  foundry  ac- 
counting arrangement,  to  be  efficient, 
should  consider  the  costing  as  a  part  of  the 
general  accounting  scheme,  in  order  that  all 
items  affecting  the  business  can  be  properly 
recorded  and  not  lost  sight  of.  Cost  infor- 
mation carried  through  the  general  books  so 


FOUNDRY     ORGANIZATION  185 

that  everything  must  be  in  balance,  at  the 
end  of  a  period  is  going  to  mean  that  the  ac- 
counting will  be  more  comprehensive  than  if 
the  costing  was  a  sort  of  spasmodic,  hit-and- 
miss,  incomplete  and  inaccurate  sort  of  an 
affair. 

It  would  not  seem  as  if  question  two  was 
entitled  to  any  consideration  whatever.  It 
is  difficult  to  explain  why  an  executive  will 
rest  content,  as  so  many  do,  with  anything 
short  of  a  monthly  accounting,  making  possi- 
ble a  thirty-day  statement  as  to  his  condi- 
tions. Cases  are  numerous,  however,  where 
a  monthly  trial  balance  and  an  annual  or 
perhaps  a  semi-annual  closing  of  the  general 
books  seems  to  be  the  custom.  Twelve  op- 
portunities in  a  year  for  locating  and  cor- 
recting faulty  conditions,  as  against  one  or 
perhaps  two  chances,  is  something  worth 
considering,  as  it  places  an  executive  in  much 
closer  touch  with  the  various  details  of  his 
business  than  a  yearly  accounting  possibly 
could — in  fact,  in  the  majority  of  cases,  if 
results  are  not  as  they  should  have  been,  it 
is  almost  impossible  to  analyze  a  yearly 
statement  so  as  to  lay  a  finger  on  the  leaks 
and  the  inefficient  conditions  which  were  re- 
sponsible.  As  no  manager  in  these  days  can 


186  MAXIMUM     PRODUCTION 

afford  to  "fool"  himself  or  to  work  in  the 
dark  regarding  what  is  going  on  all  about 
him,  we  are  safe  in  concluding  that  a  thirty- 
day  accounting  arrangement  is  absolutely  es- 
sential. 

Eegarding  question  three,  as  to  the  matter 
of  a  continuous  inventory,  a  brief  considera- 
tion should  show  that  such  an  institution  is 
not  only  advisable,  but  necessary  if  the 
accounting  scheme  is  arranged  to  make  possi- 
ble a  thirty-day  statement.  Material  is  con- 
verted money  and  should  be  regarded  just  as 
carefully  as  the  cash  is ;  but  how  is  this  con- 
verted asset  regarded  by  the  majority  of  our 
foundries!  Every  reader  can  call  to  mind 
case  after  case  where  the  proper  care  of  the 
materials  purchased  is  a  matter  of  little 
concern;  where  careful  attention  is  given  to 
the  matter  of  buying,  but  once  the  material 
arrives,  this  same  careful  attention  seems  to 
be  conspicuous  by  its  absence  in  so  far  as 
concerns  the  way  this  material  is  used.  An 
item  like  torches  and  wicking  does  not  seem 
to  be  of  any  great  consequence,  but  how 
about  the  thousand  and  one  items  with  which 
the  foundry  is  concerned  in  the  course  of  a 
year?  Some  workmen  are  careless  by  na- 
ture; others  become  so,  even  the  most  care- 


FOUNDRY     ORGANIZATION  187 

ful,  sometimes,  when  they  realize  that  not 
only  are  there  no  safeguards  thrown  about 
the  materials,  but  that  it  seems  to  be  the 
duty  of  no  one  in  particular  to  see  to  it  that 
the  materials  are  used  judiciously.  Even  if  a 
lax  handling  of  the  purchased  materials  does 
not  result  in  making  them  careless,  it  tends 
to  make  them  so ;  and  at  the  same  time  it  robs 
the  executive  of  the  means  that  might  enable 
him  to  "cut  corners. "  A  concern  which  had 
been  rather  liberal  in  allowing  their  work- 
men to  use  waste  as  they  saw  fit,  decided  to 
place  the  issuing  on  a  more  systematic  basis, 
with  the  result  that  in  the  first  month  the 
consumption  was  reduced  by  about  25  pounds 
— a  small  item,  perhaps,  but  an  item  which 
in  a  year  meant  300  pounds  less  to  pay  for. 
No  more  material  should  be  purchased  and 
used  than  is  necessary  to  produce  good  re- 
sults, and  the  less  an  executive  has  to  pay 
for,  the  more  he  can  use  in  other  directions. 
As  the  aim  of  a  continuous  inventory  is  to 
furnish  the  executive  an  efficient  control  of 
his  materials,  so  that  he  can  know  that  this 
expenditure  is  not  out  of  proportion  to  the 
results  obtained,  it  should  need  little  argu- 
ment to  convince  a  foundryman  that  purely 
from  the  standpoint  of  good  business,  of 


188  MAXIMUM     PRODUCTION 

possible  financial  gain,  a  positive  knowledge 
of  his  material  is  something  to  be  desired. 
Even  if  it  did  not  save  him  a  cent,  he  would 
at  least  know  that  because  of  this  control  of 
things  he  has  not  wasted  any  money. 

As  to  mechanical  aids  in  accounting,  I  am 
of  the  firm  belief  that  they  can  be  used  to 
decided  advantage  in  any  foundry  office. 
What  an  executive  wants  is  a  knowledge  of 
his  results  as  quickly  as  they  can  be  gotten 
to  him,  and  if  he  is  forced  to  depend  upon 
his  clerks  to  add  columns  of  figures,  multiply 
and  divide,  without  the  aid  of  mechanical  de- 
vices, he  must  either  employ  a  large  force 
of  clerks  or  wait  for  his  information  until 
it  is  too  late  to  be  of  value.  A  progressive 
manager  should  do  neither  when  an  installa- 
tion of  machines  makes  it  possible  not  only 
to  operate  with  a  minimum  number  of  clerks, 
but  to  secure  his  information  on  time.  One 
of  the  most  prominent  manufacturers  of 
adding  and  listing  machines  has  a  machine 
peculiarly  adapted  to  the  needs  of  the  foun- 
dry business,  in  that  pounds-hours-dollars 
can  be  added  at  one  time,  materially  reduc- 
ing the  work  of  summarizing  production  costs 
according  to  the  various  classifications. 
There  are  several  makes  of  multiplying  and 


FOUNDRY     ORGANIZATION  189 

dividing  machines,  any  one  of  which  will  pay 
for  itself  within  a  short  time,  as  they  not 
only  make  the  work  easier  for  the  clerks,  but 
enable  them  to  do  their  work  with  much  more 
rapidity — the  most  important  result  being 
the  absolute  accuracy  with  which  the  ma- 
chine can  be  made  to  operate. 

As  to  what  may  be  expected  from  a  com- 
prehensive accounting  arrangement,  it  can  be 
said  that  the  principal  result  would  be  clear 
and  concise  statements  reflecting  the  condi- 
tions of  the  business.  Not  very  high  sound- 
ing, perhaps,  but  full  of  meat  just  the  same. 
A  hospital  doctor  arranges  for  information 
concerning  his  patients  during  his  absence, 
and  at  regular  intervals  the  nurses  and  at- 
tendants register  in  a  systematic  way  the  im- 
portant details  concerning  pulse,  tempera- 
ture, etc.,  which,  upon  the  arrival  of  the 
physician,  will  show  him  the  condition  of  the 
patients  during  the  time  he  was  away  from 
the  hospital.  He  knows  whether  they  are 
better  or  worse,  and  from  this  information, 
plus  his  knowledge  of  the  cases,  he  is  in  a  po- 
sition to  plan  out  his  future  action.  A  manu- 
facturer is  the  doctor  of  his  own  business,  his 
statements  and  charts  being  the  information 
as  to  pulse,  temperature,  etc.,  a  study  of 


190  MAXIMUM     PRODUCTION 

which  will  enable  him  to  plan  for  the  future. 
Figures  in  themselves  are  dry  and  uninter- 
esting, but  with  reason  and  judgment  (analy- 
sis) applied  to  them  they  assume  a  far  dif- 
ferent aspect.  To  illustrate.  A  correct  ac- 
counting scheme  would  show  what  the  total 
production  was  in  a  certain  period  and  it 
would  also  show  the  number  of  hours  in 
which  this  production  was  made.  Placed  by 
itself,  this  information  would  mean  very  little 
to  the  executive  beyond  the  fact  that  his 
plant  worked  a  certain  number  of  hours  and 
that  his  production  was  a  certain  amount.  If, 
however,  these  figures  should  show,  in  addi- 
tion, that  this  production  in  the  time  speci- 
fied meant  500  pounds  per  man  per  day,  the 
executive  would  have  something  in  the  way 
of  valuable  information,  for,  by  comparing 
this  figure  with  the  relative  production  per 
man  for  previous  months,  he  could  satisfy 
himself  from  his  knowledge  of  the  work,  as 
to  whether  the  result  was  satisfactory  or  not. 
Analyzing  still  further,  he  could  get  the  rela- 
tive production  of  the  work  for  Jones,  Smith, 
and  Brown,  and  would  perhaps  find  that  on 
the  work  for  Brown  the  production  fell  below 
what  it  should  have  been.  It  is  fair  to  as- 
sume that  by  concentrating  his  attention  on 


FOUNDRY     ORGANIZATION  191 

the  production  of  Brown  he  would  be  able 
to  increase  it  to  some  extent,  any  increase 
being  accompanied  by  decrease  in  the  cost 
to  produce  the  work,  consequently  more 
profit — this  added  profit  being*  the  result  of 
an  arrangement  which  reflected  the  condition 
of  only  one  feature  of  the  business.  There 
are  many  other  possibilities  in  this  reflection 
process,  but  the  one  given  is  sufficient  for 
purposes  of  illustration.  At  any  rate,  from 
the  above  arguments  we  can  decide  in  favor 
of  an  accounting  arrangement  which  will  not 
only  be  accurate  and  efficient,  but  designed 
to  show  the  pertinent  details  of  the  business 
in  a  simple  yet  comprehensive  manner. 

Efficiency  is  the  elimination  of  inefficiency 
— once  it  is  found.  It  therefore  becomes  the 
duty  of  the  executive  so  to  arrange  his  details 
as  to  allow  this  " finding'  process  to  work 
to  advantage,  which  can  best  be  done  through 
means  of  a  correct  and  well  balanced  organ- 
ization. Human  nature  is  liable  to  pass  over 
the  possibilities  for  profit  when  some  one  else 
is  likely  to  receive  credit  for  the  good  that  is 
done,  but  once  put  a  responsibility  squarely 
up  to  an  employee,  letting  him  understand 
that  while  he  will  be  held  strictly  responsible 
for  failure,  he  will  receive  credit  for  accom- 


192 


MAXIMUM     PRODUCTION 


OFFICE  MANAGER- 


GENERAL 
MANAGER' 


_  Accounting  _TGeuera' 
-Orders  Cost 

— Purchasing 
— Receiving 

Stores  keeping  and  Issuing 
—  Shipping 

—Office  clerical   .-Time  report* 
I—  Shop  clerical — 

"—Production  data 

—Placing  cars 

—Unloading, stacking  and  piling 
—Loading  shipments 
YARD  FOREMAN — Stable 

—Teaming 

—  Handling  materials  about  yard 

—  Cleaning  up  around  yard 

—Advising  as  to  condition 
of  materials  in  yard 


— SUPERINTENDENT-^ 


I 


—  FOUNDRY  FOREMAN     see  chart  "B" 


— LABORATORY 


-Power 


Additions  and    Maintenance 
-improvements        of  plant 
to  the  plant 

—Estimates 
—Advertising 
— Traveling 


.Pattern  .hop— |«J££ 
DEPARTMENTS-  -Carpenter  shop 
-Machlhe  shop 
-Blacksmith  shop 


I—Laying  out 
patterns  and 
core  boxes 

— Checking  same 

—Delivering  to 
the  foundry 
and  core  room. 


SALES  MANAGER 


— Sales  correspondence 
—Prices 
—Commissions 
— Allowances 


TV  Engineering  Mafaxinr 


FIG.    23.      GENERAL   ORGANIZATION    OF    THE    FOUNDRY. 


plishment,  and  from  that  moment  better  re- 
sults may  be  hoped  for.  In  other  words,  the 
incentive  to  do  must  be  furnished,  for  there 
is  nothing  that  will  do  more  to  create  bar- 


FOUNDRY     ORGANIZATION 


193 


mony  and  promote  action  than  mutual  trust. 
Nonconformists  must,  of  course,  be  weeded 
out  or  swung  into  line,  for  there  can  be  no 
successful  business  without  authority.  This 
can  be  accomplished  through  the  force  of  or- 
ganization and  personality  much  more  easily 
than  it  can  be  by  the  force  of  fists.  Men 


-—Moulding 
— Coremakine 

— Melting 


FOUNDRY. 
FOREMAN" 


—  Getting  cupola  and  ladles  in  readiness 

—  Analysis 

— Charging  materials 
— Taking  off  heat 


—  Night  gang 
—Cleaning — 


•E 


•  Rattling 
Chipping 
Sand  blast 


-Inspection 


—  General  shop  labor  - 


—  Rigging 


—Cleaning  ap> 

—  Pouring  off 

—Shaking  out 

—General  labor  about  foundry 


— Requisitioning 
Supplies 


— Shop  Carrying- 


— Advance  work . 
"Assistant  Foremen 


—  Miscellaneous  materials 

—  Cores 

•Flasks      rTo  moulders 

LFrom  moulders 

Patterns-rTo  monl<lers 

<-From  moulders  {To  "attern  stora8fl 

To  pattern  shop  for  repairs 

—Laying  out  work  for  moulders  for  next  day 

—  Getting  flasks  in  readiness  for  new  work 

— Keeping  moulders  supplied  with  santLgaggers  and  clamps. 
"—  Getting  special  rigging  in  readiness  for  use  by  moulders 

The  Engineering  Maaazine 


FIG.      24.       ORGANIZATION      OF     WORK      UNDER     THE     FOUNDRY 

FOREMAN, 


194  MAXIMUM     PRODUCTION 

cannot  be  made  to  do  a  thing,  but  they  can  be 
led.  The  employee  owes  a  duty  to  his  em- 
ployer, to  be  sure,  but  this  does  not  mean 
that  this  duty  is  all  one-sided.  Make  the  or- 
ganization what  it  should  be — place  re- 
sponsibility where  it  properly  belongs — fur- 
nish a  man  with  an  incentive  to  look  for  the 
troubles  which  exist  to  a  greater  or  less  de- 
gree in  every  business,  and  the  inefficiency 
will  be  brought  to  light,  for  efforts  will  be 
made  to  bring  about  increased  productivity, 
and  increased  productivity  is  synonymous 
with  increased  efficiency. 

Authority  should  be  carefully  defined  and 
then  centralized  along  the  lines  suggested  in 
this  chapter ;  a  list  of  duties  patterned  after 
the  outline  in  Chapter  II  should  be  drawn 
up;  criticism  and  recommendations  for  bet- 
terments should  be  solicited  and  acted  upon ; 
the  details  of  the  business  should  be  studied, 
analyzed  and  standardized;  attainable  per- 
formance should  be  set,  against  which  accom- 
plishment can  be  measured,  and  once  those 
connected  with  the  organization  can  feel  that 
their  opinion  is  desired  in  matters  affecting 
their  own  work,  it  will  not  be  long  before 
they  will  be  on  the  lookout,  all  along  the  line, 
for  the  loose  ends,  the  leaks,  the  inefficien- 


FOUNDRY     ORGANIZATION  195 

cies;  and  as  a  man  looking  for  trouble  is 
sure  to  find  it,  so  will  the  man  looking  for 
places  which  can  be  bettered  be  better  able 
to  locate  them  than  he  who  goes  about  with 
his  eyes  closed,  especially  if  discovery  carries 
with  it  a  monetary  reward,  which  would  talk 
louder  than  mere  praise  could  ever  hope  to. 


CHAPTER  X 
FOUNDRY  PRODUCTION  AND  ITS  DETAILS 

A  PROMINENT  foundryman  recently 
^  ^  told  me  that  in  the  plant  in  which  he 
is  employed,  elaborate  accounting  methods 
were  devised  and  installed  (at  no  small  cost) 
and  an  elaborate  force  organized  to  compile 
accurate  and  detailed  cost  data  (also  at  no 
small  cost).  He  stated  that  results  were 
made  known  so  long  after  the  performances 
covered  by  the  records  that  it  was  simply  an 
impossibility  for  him  or  any  one  else  to  point 
out  reasons  for  certain  fluctuations  in  costs; 
and  that  as  a  matter  of  fact,  he  knew  more 
about  what  was  going  on  before  the  introduc- 
tion of  the  methods  than  he  did  after  their 
installation.  If  this  is  not  paving  the  way 
for  a  long  string  of  excuses,  enabling  those 
responsible  for  inefficiencies  to  hide  behind 
the  much  used  '  *  I  don  ?t  know, ' '  then  it  would 
be  a  difficult  task  to  ascertain  what  would  be. 
As  has  been  stated  before  in  these  pages, 
an  accounting  arrangement  is  a  recording 

196 


FOUNDRY     PRODUCTION  197 

agency,  not  a  producing  agency,  and  if  this 
recording  is  not  a  reflex  of  the  existing  con- 
ditions, then  how  can  it  be  expected  that  one 
or  a  few  men  will  know  what  caused  this  and 
what  caused  that?  At  any  rate,  a  close  study 
has  convinced  me  that  accounting  schemes 
fall  down  because  of  the  many  things  the  cost 
statistics  do  NOT  shoiv.  Without  question- 
ing the  theory  of  accounting,  without  doubt- 
ing the  accuracy  of  the  recorded  data,  we 
must  all  agree  that  any  system  of  records 
should  show  where  the  faults  are,  enabling 
the  executive  to  go  to  his  management  with 
facts  explaining  the  figures,  instead  of  ask- 
ing them  to  explain  the  figures  by  substitut- 
ing the  facts;  which,  by  the  way,  are  most 
elusive. 

The  principal  element  in  the  foundry  busi- 
ness is  its  production,  and  it  has  been  a 
source  of  wonder  to  me  why  the  details  of 
this  production  have  not  been  analyzed  to  see 
if  they  could  be  made  to  submit  to  some  sort 
of  uniform  procedure,  instead  of  something 
which  could  be  viewed  about  as  one  pleased. 
It  therefore  seems  advisable  to  take  up  the 
discussion  of  production  details  in  an  en- 
deavor to  make  this  recording  a  constructive 
as  well  as  an  analytical 


198  MAXIMUM     PRODUCTION" 

COMMEKCIAL  PRODUCTION. — This  element 
should  comprise  all  castings  made  for  sale 
to  outside  foundries,  or  to  the  company  of 
which  the  foundry  is  a  part,  or  to  both,  and 
should  represent  the  net  good  castings  pro- 
duced in  a  period,  with  no  deductions  made 
for  whatever  may  be  returned  on  account  of 
error,  defect,  or  other  reasons.  In  other 
words,  the  total  castings  produced  in  a 
period,  less  the  bad  castings  of  the  same 
period,  is  the  production.  This  may  sound 
strange  to  a  great  many,  but  as  I  have  found 
that  the  practice  of  several  foundrymen  has 
been  to  deduct  from  the  current  production 
whatever  has  been  returned  as  defective,  it 
seems  advisable  to  outline  what  seems  to  be 
the  correct  procedure. 

In  the  first  place,  what  is  produced  is  pro- 
duced regardless  of  any  outside  considera- 
tion; and  the  rule  should  be  that  after  cast- 
7 

ings  are  cleaned,  carefully  inspected,  passed 
and  shipped,  they  form  a  part  of  the  pro- 
duction and  are  subject  to  no  deductions 
whatever  for  returns  from  the  outside.  In 
proof  of  this,  let  us  assume  that  in  a  given 
period,  500,000  pounds  or  250  tons  of  cast- 
ings have  been  produced  by  the  foundry,  cost- 
ing $12,500,  and  that  the  customers  in  the 


FOUNDRY     PRODUCTION  199 

same  period  have  returned  50,000  pounds  of 
defective  castings,  which  have  been  billed 
back  at  a  price  of  $50.00  per  ton,  or  $1,250. 
Assuming  that  the  market  value  of  scrap  is 
$15  per  ton,  these  returned  castings  are 
worth  $375  to  the  foundry,  leaving  a  balance 
of  $875,  which  the  foundry  must  absorb.  If 
we  increase  the  cost  and  decrease  the  ton- 
nage, the  cost  per  ton  is  greater  (on  account 
of  the  decreased  divisor)  than  it  would  be  if 
we  simply  increased  the  cost  and  allowed 
the  tonnage  to  remain  as  it  stood. 

The  following  figures  will  clearly  show  just 
what  is  meant: 

A — Production  reduced  by  returns: 

Cost  of  250  tons $12,500 

Cost  of  returns: 

Price    $1,250 

Scrap    375 

To    expense    875 

Total  cost   $13,375 

Cost  per  ton  of  the  225  tons 

(250  —  25)     $59.44 

B — Production  not  affected  by  returns: 

Cost  of  the  250  tons $12,500 

Cost  of  returns   (see  above) .        875 

Total  cost   $13,375 

Cost  per  ton  of  the  250  tons. .  53.50 

Difference  in  cost  per  ton.  . .  .  $5.94 


200  MAXIMUM     PRODUCTION" 

It  is  evident  that  if  method  "A"  is  incor- 
rect but  in  use,  the  results  are  certainly  go- 
ing to  be  misleading,  for  no  foundryman 
wants  to  use  a  cost  of  $59.44  in  estimating  if 
$53.50  is  the  correct  figure.  Assume  that  in 
the  period  during  which  250  tons  are  pro- 
duced no  sales  are  made.  The  castings  are 
piled  in  the  storeroom  ready  for  delivery, 
when  along  comes  the  25  tons  of  defective 
castings,  and,  as  a  result,  we  proceed  to  ad- 
just our  figures  so  as  to  read  225  tons  pro- 
duced at  a  cost  of  $13,375,  or  $59.44  per  ton. 
Should  we  decide  to  take  an  inventory  on  the 
first  of  the  succeeding  period,  we  should  find 
that  we  had  250  tons  of  castings  on  hand. 
Our  book,  however,  would  show  225  tons  of 
castings,  and  as  their  value,  according  to  the 
accounting,  is  $59.44  per  ton,  we  would  natu- 
rally have  to  inventory  225  tons  of  castings 
at  $59.44  per  ton,  making  $13,375,  and  haul 
in  25  tons  of  castings  from  nowhere,  at  no 
value  whatever — decidedly  what  the  foun- 
dryman would  not  do.  If,  however,  he  in- 
ventoried 250  tons  of  castings  at  the  rate 
$59.44,  the  valuation  would  be  $14,860,  or 
$1,485  more  than  the  production  cost — which 
would  still  be  incorrect.  If  he  had  charged 
25  tons  of  scrap  to  the  scrap  account  at  $375, 


FOUNDRY     PRODUCTION  201 

and  $875  to  his  current  producing  cost  and 
left  his  production  alone,  his  result  would  be 
250  tons  at  $53.50  per  ton,  making  a  valua- 
tion of  $13,375.  In  case  the  practice  in  any 
particular  foundry  is  to  reduce  current  pro- 
duction figures  by  defectives  returned,  it 
should  be  discontinued  as  the  above  discus- 
sion should  show  its  incorrectness. 

WOKKING  CONDITIONS.- -The  next  consid- 
eration is  the  conditions  under  which  the 
work  in  a  foundry  is  usually  made,  which,  as 
every  foundryman  will  be  able  to  appreciate, 
directly  influence  cost  of  production.  A  job 
may  be  made  in  an  iron  flask  or  in  a  wood 
flask  that  may  have  seen  better  days ;  it  may 
be  made  in  a  flask  of  suitable  size,  or  a  flask 
may  be  used  considerably  larger  than  the 
work  calls  for.  The  pattern  may  be  a  mere 
skeleton  which  must  be  built  up  by  the 
moulder  before  he  can  commence  his  mould- 
ing, or  it  may  be  a  regular  pattern,  doing 
away  with  this  extra  work,  or  the  pattern 
may  be  in  the  form  of  a  sweep.  One  piece 
may  be  made  in  the  flask,  although  it  is  just 
as  likely  that  several  pieces  will  be  made  in 
the  same  flask.  The  flask  may  consist  of  a 
cope  and  drag,  or  the  drag  may  be  dispensed 
with  and  the  work  made  in  a  pit  with  a  cope, 


202  MAXIMUM     PRODUCTION 

or  perhaps  the  cope  and  drag  are  both  dis- 
pensed with  and  the  work  is  made  in  a  pit 
with  loam  plates  for  a  covering,  while  for 
certain  work  we  may  see  flasks  consisting  of 
drag,  check,  and  cope.  It  may  be  that  on 
certain  occasions  work  is  made  on  moulding 
machines,  but  because  of  congestion  at  the 
machines,  is  made  on  other  occasions  by 
hand.  The  work  may  be  bedded  in  a  pit  or 
in  a  drag,  or  it  may  be  rolled  as  when  copes 
and  drags  are  used.  One  time  the  work  may 
be  made  in  green  sand,  another  time  the  de- 
cision will  be  to  skin-dry  the  mould,  or  per- 
haps the  order  will  be  to  make  a  dry-sand 
mould.  Loam  and  sweep  work  also  enters 
into  the  consideration  as  regards  cost. 

From  the  above  it  can  easily  be  seen  how 
difficult  it  is  to  comprehend  what  a  cost 
really  means,  unless  some  information  as  re- 
gards the  working  conditions  is  at  hand ;  for 
in  a  shop  of  any  size,  having  quite  a  variety 
of  work,  it  is  safe  to  gamble  dollars  to  pen- 
nies that,  after  a  period  of  a  few  weeks,  no 
one  can  tell  with  any  degree  of  positiveness 
exactly  how  the  work  was  made  or  what 
really  caused  certain  fluctuations  in  cost.  To 
get  this  feature  down  to  a  basis  that  will 
admit  of  the  working  conditions  being  an 


FOUNDRY     PRODUCTION  203 

open  book  at  all  times,  the  following  classifi- 
cation can  be  used  to  advantage  in  correctly 
defining  how  a  piece  of  work  was  made — the 
prefixed  letters  being  the  designating  sym- 
bols of  the  various  conditions : 

METHOD  OF  MOULDING- 
*  G — Green  Sand. 

S_Skin  Dry. 

D— Dry  Sand. 

L — Loam. 
KIND  OF  MOULDING — 

B — Bedded. 

S — Swept. 

E— Boiled. 
How  MADE — 

M — Machine. 

H— Hand. 

RlGGING- 

C — Cope  only. 
DC — Drag  and  Cope. 
DCC — Drag,  Check  and  Cope. 
LP — Loam  Plates. 
PATTEKN— 

B — Regular. 
SK— Skeleton. 
S — Sweep. 

. . — Patterns  to  Gate.     (Use  correct 
numeral.) 


204  MAXIMUM     PRODUCTION 


FLASK- 


M—  Metal. 
W—  Wood. 

.  .  —  Size.     (List  dimensions.) 

If,  for  instance,  a  mould  was  made  in  dry 
sand  ;  was  rolled  ;  made  by  hand  ;  a  cope  and 
drag  used;  the  work  made  from  a  regular 
pattern,  two  patterns  to  the  gate;  in  an  iron 
flask  5  feet  by  3  feet  by  2  feet  6  inches  in 
size,  the  symbol  would  read  : 

DC—  K2—  M,  5x3X2-6, 


which  would  give  any  one  investigating  the 
record  a  year  from  the  time  it  was  made,  the 
exact  facts  in  the  case. 

DELAYS.  —  Another  feature  which  has  never 
received  a  fraction  of  the  attention  it  is  en- 
titled to  is  the  matter  of  delays  in  the  foun- 
dry, which  are  usually  buried  so  deep  in  the 
cost  figures  as  to  be  beyond  all  possibility  of 
uncovering.  Because  of  this,  I  am  of  the 
firm  opinion  that  the  usual  foundry  account- 
ing data  cannot  be  anything  else  than  ineffi- 
cient,' because  of  the  lack  of  clear  and  intel- 
ligible comparative  evidence. 

A  moulder  gets  a  job,  we  will  say,  and  it 
takes  him  24  hours  to  make  it.  According 
to  current  practice,  the  moulding  cost  is 
$9.60,  if  the  man  receives  40  cents  per  hour. 


FOUNDRY     PRODUCTION  205 

Is  this  the  correct  cost?  A  moulder  is  hired 
to  make  moulds — not  hired  to  do  a  great 
many  things  that  he  is  oftentimes  forced  to 
do,  which  in  nearly  every  instance  net  the 
company  absolutely  nothing.  If  then  in  the 
24  hours  just  mentioned,  the  moulder  in 
question  had  lost  any  time  for  causes  over 
which  he  had  no  control — causes  which  care- 
ful management  could  no  doubt  eliminate, 
then  the  facts  with  their  reasons  should  be 
properly  recorded  and  classified,  for  it  is  fair 
to  neither  the  work  nor  the  job  to  tax  it  with 
what  Mr.  Emerson  so  aptly  styles  "prevent- 
able waste." 

A  point  which  seems  curiously  difficult  to 
bring  to  the  understanding  of  managers  ac- 
customed only  to  "old-line  methods"  is  that 
a  large  part  of  the  gain  obtained  by  efficiency 
methods  comes  from  the  elimination  of  these 
wastes.  The  skeptic  as  to  "scientific  man- 
agement" has  before  his  mind  only  the  con- 
ception of  driving  men  to  higher  physical 
exertion.  Efficiency  methods,  by  reducing 
needless  wear  and  friction,  make  the  work- 
man's task  lighter  instead  of  heavier.  Ac- 
tual acceleration  of  the  workman's  motion  is 
the  smallest  part  of  the  whole  plan.  Stimu- 
lative wage  systems  are  the  final  step,  and 


206  MAXIMUM     PRODUCTION 

the  least  important  as  to  exact  method  in  de- 
tail. Let  us  assume  that  the  following  is  a 
time  analysis  of  the  job  in  question: 

Number  of  Operation.  Elapsed  Time. 

Operation.  Hrs.  Min. 

1  Getting     sand     in     condition     to 

start  work    40   (*) 

2  Waiting    on    bottom    board    and 

drag    15   (*) 

3  Waiting  on  pattern 25   (*) 

4  Placing  bottom  board  and  pattern     . .  15 

5  Placing  drag 10 

6  Ramming  the  drag 3  30 

7  Waiting  on  crane  to  roll  drag 25   (*) 

8  Boiling  drag  over 10 

9  Making  joint    30 

10  Placing  cope  section  of  pattern. .  10 

11  Waiting  for  cope 20   (*) 

12  Carpenters  barring  and  chucking 

cope  to  suit  the  pattern 1  25   (*) 

13  Placing  cope 15 

14  Setting  gaggers   1  00 

15  Ramming  cope    4  00 

16  Waiting  on  crane  to  lift  off  cope.       1  00   (*) 

17  Lifting  off  cope 20 

18  Drawing  pattern  drag  side 30 

19  Drawing  pattern  cope  side 40 

20  Finishing  drag 2  00 

21  Finishing  cope 2  30 

22  Waiting  on  cores 30   (*) 

23  Coring  up  mould   2  10 

24  Closing  mould    20 

25  Clamping  and  weighting 30 


Total  elapsed  time  on  mould.  .     24     00 


FOUNDRY     PRODUCTION  207 

A  study  of  this  analysis  reveals  the  fact 
that  on  starting  the  job  in  the  morning  the 
moulder  had  to  spend  40  minutes  in  cutting- 
over  his  sand  and  getting  it  in  condition  for 
using.  It  then  develops  that  he  loses  15  min- 
utes waiting  for  the  laboring  gang  to  bring 
his  bottom  board  and  drag,  after  which,  be- 
cause of  some  delay  in  the  pattern  shop,  he 
is  made  to  wait  25  minutes  for  his  pattern. 
He  then  starts  work  and  all  goes  well  until 
he  is  ready  to  roll  over  his  drag,  when  he 
is  forced  to  wait  25  minutes  on  account  of 
the  crane  being  in  use  elsewhere.  After  he 
rolls  the  drag  and  makes  the  joint,  the  next 
delay  is  20  minutes,  waiting  for  the  cope  to 
be  brought  to  his  floor.  It  is  then  found 
necessary  to  reset  and  chuck  the  bars  of  the 
cope,  so  that  it  will  suit  the  pattern  that  is 
being  made,  this  taking  1  hour  25  minuter. 
He  then  works  for  5  hours  15  minutes,  plac- 
ing his  cope,  setting  the  gaggers  and  ram- 
ming, and  when  ready  to  lift  off,  so  as  to  be- 
gin the  finishing  of  the  mould,  finds  that  the 
crane  is  in  use  by  some  of  the  other  moulders 
and  that  before  he  gets  it  one  hour  has 
elapsed.  Things  go  along  nicely  until  he  is 
ready  to  core  up,  but  because  of  the  cores 
being  not  quite  ready,  he  is  forced  to  wait  40 


208  MAXIMUM     PRODUCTION 

minutes.      Listing    these    delays    and    their 
length  in  minutes,  we  have: 

Hrs.  Min. 

Operation  No.  1 — Getting  sand  in  condi- 
tion to  start  work 40 

Operation  No.  2 — Waiting  on  bottom 

board  and  drag  15 

Operation  No.     3 — Waiting  on   pattern 25 

Operation  No.  7 — Waiting  on  crane  to 

roll  drag  25 

Operation  No.  11 — Waiting  for  cope 20 

Operation  No.  12 — Barring  and  Shucking 

cope  1  25 

Operation  No.  16 — Waiting  on  crane  to 
lift  off  cope  1  00 

Operation  No.  22 — Waiting  on  cores 30 

Total  time  in  delays   5     00 

As  a  result  we  find  that  in  the  24  hours 
the  moulder  spent  only  19  hours  on  work  that 
can  rightly  be  classed  as  "moulding,*'  and  5 
hours  in  delays — a  clear  waste,  or  at  least 
the  greater  part  of  it.  Assuming  that  in  the 
19  hours  the  man  worked  he  did  all  that  could 
be  asked  of  him,  then  the  ratio  between  the 
total  elapsed  time  and  the  actual  moulding 
time  of  19  hours,  is  78.5  per  cent,  conse- 
quently the  loss  or  inefficiency  of  5  hours  is 
21.5  per  cent.  If,  however,  the  job  had  been 
standardized  as  a  15-hour  job,  then  the  effi- 


FOUNDRY     PRODUCTION  209 

ciency  would  be  but  62.5  per  cent  and  the  in- 
efficiency of  37.5  per  cent  divided  as  follows : 

Fault  of  the  moulder 16.0  per  cent. 

Fault  of  the  management 21.5  per  cent. 

If,  however,  the  cost  of  the  work  is  com- 
piled on  the  basis  of  the  24  hours  (as  it  no 
doubt  would  be)  and  is  noticed  on  account 
of  the  length  of  time  that  was  taken,  we  are 
virtually  charging  the  inefficiency  to  the 
moulder,  for  after  the  costs  are  compiled, 
who  in  the  place  knows  anything  at  all  about 
the  delays  on  this  particular  joW  The  re- 
sult is  that  the  management  attaches  abso- 
lutely no  blame  to  itself ;  the  inefficiencies  are 
lost  sight  of  and  the  cost  record  filed  away 
after  the  customary — " don't  let  it  happen 
again/  A  statement  of  this  kind,  in  the 
absence  of  pointing  out  any  specific  happen- 
ing whose  recurrence  it  is  expected  to  avoid, 
is  like  asking  a  child  to  pick  up  something  it 
did  not  drop. 

Men  should  be  encouraged  to  report  de- 
lays that  are  preventable  or  for  which  they 
are  not  to  blame,  in  order  that  they  may  be 
properly  classified  so  as  to  force  action  in 
the  direction  of  bettering  conditions  to  elimi- 
nate the  majority  of  delays  that  are  usually 


210  MAXIMUM     PRODUCTION 

met  with  in  the  foundry,  which  can  be  elimi- 
nated if  the  proposition  is  approached  in 
the  right  spirit. 

PKODUCTIVITY. — It  is  essential  in  any  un- 
dertaking to  know  as  much  as  possible  about 
what  is  being  accomplished,  but  it  is  equally 
important  to  have  this  knowledge  condensed 
in  as  brief  a  form  as  will  correctly  convey  the 
desired  information.  In  the  foundry  busi- 
ness we  deal  to  quite  an  extent  with  weight, 
and  because  of  this  fact  the  tendency  has 
been,  and  is  now,  to  indulge  in  too  much  con- 
sideration of  "tonnage."  Tons,  tons,  and 
more  tons  is  the  eternal  cry;  consequently, 
who  can  blame  the  usual  shop  management 
because  it  suffers  from  "failing  memory"  as 
regards  light  stuff  which  cuts  such  a  small 
figure  in  increasing  tonnage;  because  it 
crowds  work  oftentimes  regardless  of  cost; 
because  it  puts  five  or  six  men  ramming  a 
cope,  in  order  to  get  the  job  out  with  a  rush, 
when  two  men  or  three  at  the  outside  could 
work  to  decidedly  better  advantage!  Not  the 
management,  but  the  wrong  ideal  set  before 
the  management,  is  to  blame  for  these  things. 

Many  an  executive  is  perfectly  satisfied 
when  his  statement  shows  a  high  tonnage, 
for  the  reason  that  it  is  usually  accompanied 


FOUNDRY     PRODUCTION 

by  a  low  relative  cost,  and,  as  a  result,  it  is 
considered  that  the  attainment  is  up  to  the 
mark.  It  may  sound  very,  very  strange,  but 
it  is  tills  one  feeling  of  satisfaction  over  high 
tonnage  that  has  proven  such  a  stumbling 
block  in  the  way  of  attaining  the  highest  ef- 
ficiency in  the  foundry.  A  large  tonnage  be- 
cause it  is  large  is  in  itself  a  direct  factor  in 
bringing  about  a  reduction  in  cost,  often- 
times regardless  of  any  other  consideration, 
and  because  of  this  fact  it  is  a  very  easy  mat- 
ter for  inefficiencies  to  be  lost  sight  of.  Men 
may  be  working  to  disadvantage;  the  plan- 
ning of  the  work  may  not  be  all  that  it  should 
be;  materials  may  be  used  recklessly;  rig- 
ging may  be  used  without  much  regard  to 
its  adaptability  to  the  work;  and  yet  "when 
the  returns  are  all  in,"  a  high  tonnage  at  a 
low  cost  overshadows  the  defects  in  the  exist- 
ing scheme  of  things.  Reflection  should 
show  that  it  is  possible  for  an  inefficient  shop 
to  do  a  business  at  a  profit  so  long  as  its  ton- 
nage can  be  kept  above  a  certain  figure,  but 
once  let  it  drop  below  the  balancing  point 
and  an  investigation  of  the  inefficiencies  is 
immediately  in  order.  The  trouble  is  that 
there  is  too  much  consideration  given  to  fig- 
ures in  the  aggregate — the  final  results ;  and, 


212  MAXIMUM     PRODUCTION 

as  was  pointed  out  in  a  preceding  chapter, 
the  usual  study  of  things  begins  at  the 
wrong  end — the  top  instead  of  the  bottom. 

To  reverse  the  usual  order  of  things,  to  be 
in  possession  of  knowledge  in  condensed 
form,  that  will  show  how  things  are  progress- 
ing, it  is  necessary  to  decide  upon  some  unit 
that  will  convey  more  meaning  than  is 
usually  conveyed  by  the  final  tonnage  and 
cost  statements.  The  law  of  cause  and  effect 
may  help  us.  Production  is  the  result  of  the 
work  of  the  men  who  make  it.  Why  not 
hitch  the  two  elements  together — the  pro- 
duction in  pounds  and  the  work  of  the  men 
in  time,  calling  the  ratio  that  it  is  thus  possi- 
ble to  ascertain,  productivity — which  would 
mean  the  relative  amount  produced  in  a 
given  time  1  This  would  seem  a  logical  unit 
for  two  reasons: 

1 — Because  the  amount  that  a  man  pro- 
duces in  a  given  time  is  the  basic  factor  de- 
termining the  cost  of  what  he  produces. 

2 — Because  it  furnishes  a  unit  of  compari- 
son as  regards  accomplishment. 

The  importance  of  the  first  reason  will  be 
appreciated  upon  consideration  of  the  exam- 
ple given  on  the  following  page : 


FOUNDRY    PRODUCTION  213 

EXAMPLE  SHOWING  INFLUENCE    OF  PRODUCTIVITY 

ON  COST 
Case  A.  B. 

Weight  of  casting 250  Ib.         250  Ib. 

Produced    in    given    time    (ten 

hours)    1,000  "       1,500  « 

Labor  rate  per  hour $0.30  $0.30 

Cost  of  the  total  amount  pro- 
duced in  the  ten  hours.  .  .  .         3.00  3.00 

Cost  of  the  total  amount  pro- 
duced per   100   Ib 30  .20 

Cost    of    the    250-lb.   casting 

then    becomes    .75  .50 

NOTE. — For  a  further  discussion  of  productivity  see  chapter  13,  on  "The 
Importance  of  Correct  Burden  Apportionment." 

As  regards  the  second  reason.  Assuming 
the  casting  in  cases  A  and  B  to  be  from  the 
same  pattern,  it  is  evident  that  in  the  same 
length  of  time,  the  production  at  B  was  in- 
creased 50  per  cent  over  that  shown  at  A, 
consequently  the  man  who  made  the  six  cast- 
ings is  a  better  workman  than  the  one  who 
made  the  four  castings ;  or,  if  the  same  man 
made  the  work,  his  productivity  was  better 
in  one  instance  than  in  the  other.  Our  unit 
of  productivity  takes  into  account  the  impor- 
tance of  both  1  and  2,  whether  the  test  is 
applied  to  a  single  casting,  a  group  of  cast- 
ings, a  division  of  the  production,  or  the  to- 
tal amount  produced. 

The  unit  can  best  be  expressed  in  terms  of 


214  MAXIMUM     PRODUCTION 

pounds  produced  daily  and  the  rule  would 
be: 

M  =  Hours  of  moulding. 
"W  =  Weight  of  casting  in  pounds. 
H  =  Hours  to  the  working  day. 
P  —  Productivity. 
W 

—  X  H  -  P. 
M 

Some  attempt  has  been  made  in  a  number 
of  foundries  to  use  this  unit  in  getting  at 
facts  concerning  production,  but  it  has  been 
found  that  a  decided  difference  of  opinion 
exists  concerning  the  elements  making  up  the 
unit.  The  time  element  has  been  found  in 
certain  cases  to  be : 

1-  -The  hours  of  moulders  only,  disregard- 
ing special  laborers  working  as  moulders,  ap- 
prentices, and  laborers  directly  assisting  the 
moulders. 

2-  -The  hours  of  moulders,  special  labor- 
ers working  as  moulders,  apprentices,  and 
laborers  directly  assisting  moulders. 

3-  -The  hours  of  moulders,  special  laborers 
and  apprentices  (laborers  not  included). 

4-  -The  hours  of  moulders  and  coremakers 
because  their  time  is  considered  a  part  of 
Direct  Labor. 


FOUNDRY     PRODUCTION  215 

It  naturally  follows  that  each  one  of  the 
four  elements,  if  used,  will  give  different  re- 
sults. One  foundryman  using  No.  1  will  tell 
another  who  may  be  using  No.  4  that  he  is 
producing  1,000  pounds  per  man  per  day, 
and  the  second  will  say  that  he  is  getting  800 
pounds  per  man  per  day.  Both  may  be  pro- 
ducing about  the  same  amount,  but  the  dif- 
ference in  the  element  used  seems  to  make 
the  practice  of  one  foundryman  much  better 
than  that  of  the  other.  If  consideration  is 
given  to  No.  1,  it  will  be  found  that  the  rela- 
tive expression  of  productivity  is  not  abso- 
lutely correct;  for,  while  the  moulders  may 
be  producing  a  certain  amount,  others  have 
assisted  the  moulders  to  a  greater  or  less  de- 
gree in  turning  out  the  production,  and  the 
time  of  this  assistance  is  as  much  a  part  of 
the  producing  time  as  that  of  the  moulders 
themselves.  As  for  No.  4,  it  will  be  appar- 
ent upon  consideration  that  coremakers  do 
not  influence  production  as  far  as  the  core 
labor  is  concerned.  The  core  setting  bv  the 

V 

moulders  is,  of  course,  a  part  of  the  produc- 
ing time,  |he  result  of  which  is  castings. 
Core  labor,  however,  produces  nothing  of  a 
tangible  nature,  and,  as  the  aim  of  our  unit 
is  to  get  at  the  relation  between  what  is  pro- 


216  MAXIMUM     PRODUCTION 

duced  and  the  time  in  which  it  is  produced,  it 
seems  reasonable  to  exclude  the  time  of  core- 
makers  from  our  consideration  of  produc- 
tivity. This  leaves  No.  2  and  No.  3,  either  of 
which  can  be  used,  depending  upon  the  policy 
in  any  certain  shop,  the  procedure  being  as 
follows : 

1-  -If  the  policy  is  to  assign  a  laborer  as  a 
regular  assistant  to  the  moulder,  then  the 
time  element  should  include  the  time  of  the 
laborer. 

2 — If,  however,  the  gang  of  laborers  is  a 
floating  body,  their  time  can  be  left  out  of 
the  consideration. 

It  may  be  well  to  state  in  connection,  that 
while  the  terms  productivity  and  efficiency 
are  in  a  sense  synonymous,  the  above  re- 
marks on  productivity  must  not  be  construed 
as  meaning  that  considerations  of  efficiency 
are  to  be  relegated  to  the  rear.  Efficiency, 
as  was  pointed  out  in  a  preceding  chapter, 
is  the  ratio  existing  between  the  estimated 
or  possible  performance  and  the  actual  at- 
tainment. A  standard  producing  time 
against  the  actual  producing  time*;  the  possi- 
ble production  against  the  actual  weight 
produced,  will  give  the  relative  degree  of 
efficiency  as  to  time  or  weight.  The  pro- 


FOUNDRY    PRODUCTION  217 

ductivity  ratio,  however,  considers  actual  at- 
tainments only,  and  merges  two  different  ele- 
ments— production  and  time — instead  of  the 
same  elements,  so  while  there  may  seem  a 
sameness  in  the  terms,  there  is,  after  all,  a 
difference  in  the  two  units  of  comparison. 

AVEKAGE  WEIGHT  OF  CASTINGS. — Another 
unit  which  can  be  used  to  advantage  takes 
consideration  of  the  average  weight  of  what 
is  produced  in  a  given  period,  and  this  can 
be  employed  with  special  reference  to  pro- 
ductivity. We  sometimes  hear  that  the 
reason  for  a  high  cost  of  production  is  the 
light  work  made,  or  if  the  cost  is  a  low  one, 
heavy  work  is  given  as  the  reason.  The  fol- 
lowing rule  will  therefore  give  some  infor- 
mation which  may  prove  of  value: 

W  =  Weight  of  the  castings  produced 
(in  total  or  by  classes). 

N  =  The  number  of  pieces  made. 

A  =  The  average  weight  per  piece. 

W 

^ 

'     N 

It  is  a  good  thing  to  know  that  in  a  certain 
period  of  time  the  productivity  was  800 
pounds  per  man  per  day,  while  in  another 
it  was  1,000  pounds  per  man  per  day,  but  if 


218  MAXIMUM     PRODUCTION 

it  was  found  that  in  the  first  period  the  aver- 
age weight  of  the  castings  was  800  pounds 
and  in  the  second  period  500  pounds,  our  in- 
formation, which  would  naturally  include  a 
knowledge  of  the  class  of  the  work  made, 
would  be  much  more  complete. 

CLASSIFICATION  OF  PRODUCTION. — A  general 
policy  of  classifying  production  should  be 
adopted,  as  outlined  in  the  concluding 
chapter — "Cost  Apportionment  in  Various 
Classes  of  Foundries. "  To  each  one  of  the 
classes,  a  symbol  should  be  given  for  use  in 
charging  and  identifying  them.  I  doubt  very 
much  if  it  is  advisable,  except  in  extreme 
cases,  to  classify  according  to  the  individual 
pattern,  as  this  makes  the  costing  altogether 
too  elaborate  and  cumbersome,  but  I  do  be- 
lieve in  classifying  by  main  classes  having  a 
limited  number  of  subdivisions,  with  a 
proper  provision  for  getting  the  production 
cost  of  any  particular  patterns  if  desired. 


CHAPTER  XI 

EFFICIENT      DISPATCHING     IN      THE 

FOUNDRY 

PARADOXICAL  as  it  may  seem,  many 
apparently  unimportant  things  are 
found  in  the  end  to  be  vastly  import- 
ant. Under  the  heading,  "delays,*  in  the 
preceding  chapter,  it  was  found  that  the 
waste  of  five  hours  of  the  twenty-four  spent 
on  the  job  in  question  was  due  to  causes 
most  of  which  could  have  been  eliminated. 
No  one  would  accuse  the  management  of  this 
shop  of  deliberately  forcing  the  five  hours 
of  waste  time  on  the  moulder  who  made  the 
work.  If  not  the  result  of  deliberation,  the 
waste  must  have  resulted  from  carelessness, 
faulty  conditions,  or  other  reasons.  It  seems 
certain  it  could  not  have  been  considered  of 
the  utmost  importance,  or  steps  would  have 
been  taken  which  would  have  resulted  in  the 
wasted  hours  not  appearing  in  the  list. 

What,  then,  was  the  trouble?     It  can  no 
doubt  be  said  for  this  particular  shop  man- 

219 


220  MAXIMUM     PRODUCTION 

agement  that  it  was  probably  doing  the  best 
it  could  to  run  things  economically,  accord- 
ing to  the  generally  accepted  conception  of 
what  constitutes  the  best  one  can  do;  it  was 
probably  holding  its  own  with  other  foun- 
dries in  turning  out  castings  of  good  quality 
in  point  of  material  and  workmanship ;  it 
was  no  doubt  ambitious  to  get  castings  made 
as  quickly  as  possible;  it  probably  felt  a 
4 'fall  down"  as  keenly  as  you  or  I  would  feel 
it ;  it  no  doubt  possessed  as  good  a  technical 
knowledge  of  the  foundry  business  as  would 
be  found  in  other  shops.  Yet,  in  spite  of  all 
this,  the  illustration  cited  shows  very  forci- 
bly that  something  must  have  been  decidedly 
wrong — something  that  would  justify  a  care- 
ful analysis  as  to  underlying  causes,  with  an 
outline  of  a  more  efficient  procedure — the 
purpose  of  this  paper. 

Did  you  ever  see  a  bird,  in  its  search  for 
twigs,  straw  and  the  like!  Hunting  these 
things  for  fun?  Hardly.  It  is  simply  plan- 
ning ahead  against  the  time  when  a  warm, 
comfortable  nest  will  be  wanted  for  the  little 
ones  to  come.  It  does  not  wait  until  they 
have  arrived — the  bird  sees  to  it  that  the 
nest  is  ready  before  it  will  be  needed,  and,  as 
a  result,  we  call  it  a  wise  bird. 


EFFICIENT  DISPATCHING  IN  THE  FOUNDRY     221 

Watch  a  sprinter.  He  does  not  depend 
altogether  upon  his  speed  to  carry  him  over 
the  course.  His  whole  aim  is  centered  on  the 
start — the  dash  at  the  crack  of  pistol.  Even 
to  the  long-distance  runner  the  start  is  of 
moment — he  thinks  ahead.  Would  he  run 
his  head  off  at  the  beginning!  Not  if  he 
knew  the  racing  game  as  an  expert  knows  it. 
His  start  would  consider  conserving  his  en- 
ergies for  the  contest  before  him.  He  would 
even  let  others  pass  him,  secure  in  the  belief 
that  the  finish  would  take  care  of  itself  if 
the  start  was  one  that  did  not  make  too  many 
inroads  upon  his  vitality  before  he  got  his 
"second  wind.' 

These  illustrations  point  out  a  lesson 
worthy  of  attention,  for  they  show  conclus- 
ively the  importance  of  the  prepared  state- 
the  value  of  the  start.  Results,  whether  in 
life  or  in  business,  depend  largely  upon  this 
start,  and  because  this  is  so,  industrial  en- 
deavor lias  suffered  much  from  failing  to  give 
proper  attention  to  a  definite  plan  of  pro- 
cedure. 

This,  then,  is  a  cause  of  the  trouble  that 
we  started  to  find.  If  the  work  had  been 
made  to  submit  to  a  definite  plan  of  pro- 
cedure, the  start  would  have  received  its 


222  MAXIMUM     PRODUCTION 

share  of  attention — as  much  attention  as  the 
work  itself,  if  not  more.  Not  only  is  this 
general  neglect  of  the  start  largely  to  blame 
for  inefficiency,  but  the  spirit  of  things  is 
usually  impulsive  rather  than  methodical. 
"Get  the  thing  done/'  is  the  order,  and  the 
procedure  becomes  one  of  a  rush,  hustle, 
tear-things-to-pieces  kind,  in  a  mad  effort  to 
obey  orders,  regardless  of  whether  or  not 
these  orders  could  have  been  obeyed  to  bet- 
ter advantage  some  other  way. 

As  a  test,  it  would  be  well  to  try  the  fol- 
lowing: In  the  first  place,  size  up  the  situa- 
tion generally  as  regards  work  under  way, 
orders  ahead,  etc.,  and  after  the  noon 
hour,  call  in  the  shop  foreman,  the  core- 
room  foreman,  the  flask  boss,  the  flask 
carpenter,  the  man  in  charge  of  the 
pattern  storage,  the  labor  boss,  and  the 
pattern-shop  foreman.  In  a  general  way  tell 
them  that  the  purpose  of  the  meeting  is  to 
line  up  the  procedure  for  the  next  day  and 
perhaps  the  day  following,  and  that  each  one 
will  be  expected  to  outline  his  share  of  the 
work.  Be  prepared  to  list  the  procedure  as 
it  is  outlined.  Have  before  you  a  list  of  the 
moulders,  and  begin  by  asking  the  shop  fore- 
man what  he  proposes  giving  each  of  his 


EFFICIENT  DISPATCHING  IN  THE  FOUNDRY     223 

* 

men  on  the  list,  for  next  day.  Also  inquire 
what  they  will  start  on  after  the  work  just 
mentioned  has  been  made.  Ask  the  foreman 
for  his  ideas  as  to  the  time  the  jobs  men- 
tioned will  probably  take.  If  two  jobs  are 
not  sufficient  for  the  day,  get  him  to  assign 
enough  work  to  cover  the  man's  time  fully. 

Now  get  your  core-room  foreman  to  advise 
you  what  cores  he  has  made  or  is  going  to 
make  for  the  next  day's  work.  Ascertain  if 
the  pattern-storage  man  can  tell  you  what 
patterns  he  has  laid  out  or  is  going  to  lay 
out  for  the  work  on  the  following  day,  and 
then  quietly  ask  the  labor  boss  what  rigging 
in  the  way  of  flasks,  plates,  etc.,  he  is  plan- 
ning to  bring  in  for  the  work  to  be  made  in 
the  next  few  days.  See  if  the  flask  boss  can 
tell  you  what  he  is  doing  towards  getting 
flasks  ready  for  the  next  day's  work,  and  then 
ask  the  flask  carpenter  what  flasks  he  is 
working  on,  or  what  he  expects  to  work  on 
to  accommodate  the  new  work  coming  in. 
Find  out  what  patterns  the  pattern-shop 
foreman  is  getting  ready  for  the  shop.  Other 
questions  will  suggest  themselves  as  you  go 
along,  which  you  can  put  to  those  interested. 

After  each  one  has  had  an  opportunity  to 
outline  his  share  of  the  procedure,  dismiss 


224:  MAXIMUM     PRODUCTION 

the  meeting  and  study  carefully  what  you 
have  before  you.  Also  arrange  on  the  fol- 
lowing day  to  check  up  the  shop  operations 
to  see  how  closely  the  outline  of  the  preced- 
ing day  is  being  lived  up  to  by  each  one  in- 
terested. Note  the  waits,  delays,  changes  in 
plans,  etc.  If  the  results  prove  surprising, 
both  in  the  meeting  and  the  procedure  on 
the  day  following;  if  you  find  that  the  "all 
pull  together ' '  spirit  is  conspicuous  by  its  ab- 
sence; that  the  actual  carrying  out  of  the 
work  comes  as  close  to  schedule  as  a  train  in 
a  winter  blizzard ;  if  you  find  that  the  meeting 
which  started  with  broad  grins  ends  in  be- 
wilderment and  confusion  and  that  there  was 
considerable  guess-work  about  the  whole 
thing,  it  is  safe  to  conclude  that  the  value 
of  the  result  depends  upon  the  efficiency  of 
the  start. 

A  train  leaves  New  York  at  eight  o'clock 
in  the  morning  and  is  due  in  Buffalo  at  five 
o  'clock  in  the  afternoon,  stopping  at  Albany, 
Utica,  Syracuse  and  Rochester.  From  the 
time  preceding  its  leaving  New  York  until 
it  arrives  in  Buffalo,  the  train  is  carefully 
watched,  its  leaving  time  at  each  point  be- 
ing wired  ahead,  orders  being  issued  at  each 
stop  for  the  next  lap  of  the  journey.  Does 


EFFICIENT  DISPATCHING  IN  THE  FOUNDRY      225 

the  engineer  or  conductor  worry  about  the 
arrival  in  Buffalo!  Hardly.  Their  chief 
concern  is  the  trip  from  New  York  to  Al- 
bany; Albany  to  Utica ;  Utica  to  Syracuse,  to 
Rochester,  to  Buffalo.  If  engines  are  to  be 
changed  at  Albany,  the  engine  is  ready  when 
the  train  pulls  in.  If  a  slower  train  is  ahead 
of  the  fast  one,  at  a  certain  place,  known  in 
advance,  it  is  side-tracked  to  allow  the  fast 
one  to  pass.  In  case  a  dining-car  is  to  be 
attached  at  Utica,  it  is  a  safe  bet  that  the 
diner  will  be  added  to  the  train  as  soon  as 
the  stop  is  made.  If  the  crew  is  supposed 
to  change  at  Rochester,  it  will  be  found  that 
the  new  crew  is  on  hand  and  waiting  for  the 
train — something  would  happen  if  they  were 
not.  The  train  arrives  in  Buffalo  on  sched- 
ule time,  according  to  plan  mapped  out  in 
New  York  before  the  train  left,  and  lived 
up  to  all  along  the  line — a  smooth,  harmoni- 
ous working  arrangement,  known  in  railroad 
circles  as  "dispatching'  -the  theory  of 
which  is,  no  train  is  ready  until  every  tiling 
is  or  will  be  ready  for  the  train.  Why  not, 
therefore,  apply  the  same  theory  to  the  foun- 
dry business  and  dispatch  jobs  in  the  same 
manner  as  a  railroad  dispatches  its  trains? 
In  order  to  get  all  that  is  possible  out  of 


226  MAXIMUM     PRODUCTION 

the  foundry,  we  must  get  away  from  the 
theory  that  making  a  piece  of  work  depends 
altogether  upon  the  moulder,  for  the  moulder 
in  the  broadest  sense  is  only  a  medium — the 
factor  between  (A),  what  he  is  given  to  work 
with,  (B),  the  conditions  under  which  he 
works,  and  the  finished  casting,  from  which 
we  can  readily  understand  why  A  and  B 
should  receive  careful  consideration  in  their 
relation  to  proper  dispatching  of  work — 
more  attention  than  is  usually  given  them. 

As  to  A- -the  articles  a  moulder  is  given 
to  work  with — they  can  be  classified  as  shown 
on  the  opposite  page. 

Concerning  B — the  conditions  under  which 
a  moulder  works — it  is  obvious  that  he  can 
work  efficiently  only  when  he  can  use,  to  the 
best  advantage,  the  items  listed  at  A,  so  it  is 
distinctly  up  to  the  shop  management  to  see 
to  it  that  the  men  are  not  held  up  because 
of  faulty  conditions.  They  must  be  made 
right.  As  an  example  of  what  I  mean:  A 
moulder  (now  a  shop  foreman)  had  been 
hired,  and,  coming  from  another  city,  he 
started  in  the  next  morning.  He  was  given 
a  piece  of  work  to  make,  and  from  11  to  12 
o'clock  he  was  hunting  up  gaggers  for  his 
mould ;  not  finding  any,  he  looked  up  his  fore- 


EFFICIENT  DISPATCHING  IN  THE  FOUNDRY    227 

CLASSIFICATION    OF    ARTICLES   WITH    WHICH   THE 

MOULDER  WORKS 


1 — Those  subject  to  changes 
(equipment  and  rigging)  / 


'Patterns 
Sweeps 
Flasks 
Loam  plates 
Lifting  plates  or  rings 
Spindles 
Arbors 
Cores 


2 — Those  subject 
to  little  or  no  •< 
change. 


-A — Facilities 


-Tools 


f  Facing 
Sand  -<  Heap 

(^Parting 
Risers 
Xails 
Gaggers 
Pods 
Chaplets 
Blacking  or  wash 
Clamps 
Wedges 

Chains  and  roll- 
ing devices 

-Rammers 
Hammers 
Shovels 

Finishing  tools 
Torches  and  wick- 
ing 
Hooks 

Wood  screws 
Brushes  and  swabs 


228  MAXIMUM     PRODUCTION 

man  and  advised  him  as  to  his  fruitless 
search.  The  foreman  asked  the  moulder  if 
he  thought  he  had  any  tucked  away  in  one 
of  his  vest  pockets,  to  which  the  moulder  re- 
plied— "no,  and  I  didn't  bring  any  in  my 
grip,  either."  After  the  noon  hour,  the 
moulder  quit,  and  the  foreman  was  at  a  loss 
to  understand  why.  The  moulder  was  quick 
to  see  that  he  would  be  working  at  a  disad- 
vantage if  the  foreman  evinced  no  greater 
concern  than  his  remark  indicated,  and  the 
foreman  violated  two  of  Mr.  Emerson's 
twelve  principles  of  efficiency — common  sense 
and  the  fair  deal — first,  in  making  the  speech 
he  did,  and  second,  in  not  seeing  to  it  that  the 
gaggers  were  quickly  found  and  promptly 
supplied  the  moulder. 

The  conditions  under  which  a  moulder 
works  we  may  classify  in  a  general  way  as 
follows : 

1- -Foundry  orders — knowledge  of  and 
their  following  up. 

2 — Storage  and  handling  of  materials, 
supplies,  etc. 

3 — Selection  of  patterns,  sweeps  and  core 
boxes. 

4- -Repairing  and  altering  the  above. 


EFFICIENT  DISPATCHING  IX  THE  FOUNDRY     229 

5 — Selection  of  flasks. 

6- -Repairing  and  altering  the  above. 

7-  -Flask  storage,  piling,  etc. 

8 — Removal  of  castings,  gaggers,  rods, 
etc.,  from  the  sand. 

9-  -Tempering  of  moulding  sand  for  use 
by  moulders. 

10 — Mixing*  of  facing  sand. 

11 — Shop  carrying  arrangements  with 
reference  to  the  equipment  and  rigging  listed 
at  Al. 

12 — Supplying  the  moulders  with  facilities 
listed  at  A2A. 

13 — Furnishing  the  moulder  with  proper 
tools  by  list  A2B. 

14- -Crane  facilities. 

15 — Arrangements  affecting  the  general 
shop  labor. 

Foundry  dispatching  is  made  up  of  three 
principal  elements: 

1-  -The  parties  concerned. 

2-  -The  planning. 

3- -Execution  according  to  the  plans. 
And  if  proper  attention   is  given  to   them, 
faulty  conditions  will  cease  to  exist,  for  their 

«/ 

assumption  is — no  job  is  ready  until  every- 
thing is  OR  WILL  BE  ready  for  the  job. 


230  MAXIMUM     PRODUCTION 

The  persons  concerned  are : 
1-  -The  foundry  foreman. 
2- -His   assistant. 
3 — The  core-room  foreman. 
4 — The  pattern-shop  foreman. 
5 — The  man  in  charge  of  the  pattern  stor- 
age. 

6 — The  man  in  charge  of  the  flasks. 
7 — The  flask  carpenter. 
8- -The  labor  boss. 

The  element  planning  is  made  up  of  six 
principal  considerations : 

1-  -What  is  to  be  made       i  ~  , 
2- -Who-  it  is  to  be  made  by/ K 
3- -Where  it  is  to  be  made — Location 
4- -When  it  is  to  be  made — Time 

5 — Hoiu  it  is  to  be  made         ")  T 

a     TT7V7     7    j.  -j.  •        i,         j    r    Procedure 
o — With  what  it  is  to  be  madeJ 

while  execution  is  made  up  of: 
1-  -Knowledge  of  the  plans  made. 
2 — Preparations  for  carrying  them  out. 
3 — Carrying  out  the  plans  as  per  schedule. 

Now  that  the  articles  used  have  been  classi- 
fied, the  general  shop  conditions  outlined, 
and  dispatching  defined  as  regards  elements 
and  considerations,  the  task  of  next  impor- 
tance is  to  harness  the  three  together  so  as 


EFFICIENT  DISPATCHING  IN  THE  FOUNDRY    231 

to  make  an  efficient  working  arrangement. 
To  this  end  we  must  give  some  considera- 
tion to  that  which  is  really  our  starting  point 
— the  order,  both  as  regards  its  availability 
and  the  promise  to  ship.  Eight  here  is  where 
nearly  every  foundry  experiences  trouble- 
some occasionally,  others  nearly  all  the  time 
— because  not  enough  attention  is  given  to 
the  availability  of  the  work  and  promises  are 
made  before  all  the  facts  are  known. 

What  must  be  considered  in  order  to  pass 
upon  the  availability  of  a  piece  of  work!  An 
order  must  pass  the  following  test : 

1 — Are  the  patterns  and  core  boxes  as  per 
order? 

2 — Are  they  ready  for  delivery  into  the 
foundry? 

3 — Are  there  flasks  to  accommodate  the 
work? 

4 — If  not,  will  they  have  to  be  made,  or 
can  other  flasks  be  altered  to  suit,  and  if 
so,  what  work  will  be  necessary? 

5 — What  will  the  job  take  in  the  way  of 
rigging? 

6 — Is  the  rigging  on  hand  ready  for  use,  or 
will  it  have  to  be  made?  If  it  will  have  to 
be  made,  what  will  be  necessary? 

7-  -Will  anything  be  necessary  in  the  way 


232  MAXIMUM     PRODUCTION 

of  specials,  as  for  instance    rods,    gaggers, 
clamps,  etc.? 

8 — How  long  will  it  take  to  get  the  job 
prepared  as  above? 

Until  an  order  can  pass  this  test,  it  should 
be  classified  as  not  available,  and  every  one 
so  advised,  and  under  no  consideration,  ex- 
cept that  of  the  most  extreme  urgency,  should 
such  a  job  be  started.  A  rule  of  this  kind 
will  work  wonders  in  any  foundry. 

After  the  matter  of  availability  has  been 
passed  upon,  the  next  thing  to  consider  is- 
the  promise — a  point  about  which  a  book 
could  be  written.  Orders  are  either  accom- 
panied by  a  request  to  make  shipment  at  a 
certain  time  or  are  marked  "rush,"  "as  soon 
as  possible,"  "at  once,"  or  perhaps  the  mak- 
ing of  the  work  is  left  altogether  to  the  shop 
management.  Promises  are  usually  required 
in  all  instances,  and  if  not  they  should  be 
made  and  recorded  just  the  same  as  if  they 
were  required,  so  that  there  will  be  some  in- 
formation on  hand  should  the  shop  be  asked 
a  little  later  to  furnish  some  idea  as  regards 
shipment.  After  promises  have  been  made, 
it  is  not  a  difficult  task  to  keep  such  track  of 
them  as  will  result  in  an  excellent  knowledge 
of  anticipated  delivery  dates.  One  thing 


EFFICIENT  DISPATCHING  IN  THE  FOUNDRY       233 

should  be  remembered,  however — promises 
should  never  be  made  before  the  availability 
of  the  tvork  has  been  passed  upon.  Such 
promises  are  never  dependable,  and  the  time 
and  enersrv  in  making  them  is  usuallv  wasted 

o  ^  o  V 

-as  a  great  many  know. 

An  efficient  order  arrangement  that  will 
give  proper  consideration  to  the  two  fea- 
tures (availability  and  the  promise)  must 
therefore  be  so  arranged  as- 

1-  -To  admit  of  a  quick  and  ready  refer- 
ence to  the  various  items  called  for. 

2 — To  show  availabilitv  or  non-availabil- 

»/ 

ity,  at  a  glance. 

3-  -To  show  anticipated  delivery  dates. 

4-  -To  notify  the  pattern  storage  what  is 
wanted  in  the  way  of  patterns,  sweeps  and 
core  boxes. 

5-  -To  enable  pattern  storage  to  promptly 
notify  foundry  as  to  the  condition  of  the 
items  called  for. 

6 — To  have  the  patterns,  sweeps  and  core 
boxes  laid  out  by  the  pattern  storage  in  a 
space  necessary  to  allow  those  who  are  re- 
sponsible for  the  planning  to  get  at  them 
easily. 

7-  -To  show  the  reasons  why  the  work  is 
not  available. 


234  MAXIMUM     PRODUCTION 

8- -To  have  a  provision  for  checking  the 
work  as  the  following  items  become  ready: 

A- -patterns  and  core  boxes;  B — flasks; 
C — rigging. 

It  is  evident  from  the  above  that  we  are 
now  in  possession  of  three  valuable  items  of 
information : 

1-  -We  know  what   is  not   available,   and 
why. 

2-  -We  know  when  work  becomes  available. 
3- -We  know  when  work  is  wanted,  or  the 

promised  date. 

This  knowledge  serves  as  a  valuable  aid  in 
keeping  after  the  jobs  not  available  and  se- 
lecting what  should  be  made — a  condition  of 
affairs  much  to  be  desired,  as  every  one  con- 
ducting foundries  can  well  appreciate.  If 
every  foundryman  was  in  possession  of  the 
above  information,  what  a  saving  there 
would  be  in  time  that  is  now  wasted  because 
the  patterns  are  not  ready,  or  cores  are  not 
made,  or  flasks  are  not  in  shape,  or  rigging 
is  not  in,  and  many  other  causes  which  result 
in  loss  of  time  that  nets  the  company  abso- 
lutely no  return  for  the  amount  invested. 

With  our  knowledge  of  what  is  available 
and  what  is  to  take  preference,  we  can  com- 
mence the  task  of  getting  the  work  under 


EFFICIENT  DISPATCHING  IN  THE  FOUNDRY       235 

way  according  to  the  following  general  out- 
line: 

1-  -The  work  should  be  in  charge  of  a  com- 
mittee, comprising  the  foundry  foreman,  his 
assistant,  the  core-room  foreman,  the  flask 
and  labor  bosses. 

2 — The  work  should  be  undertaken  as  early 
in  the  day  as  possible,  so  as  to  allow  ample 
time  to  get  in  readiness  whatever  may  be 
needed  to  start  the  jobs  off  properly. 

3-  -The  work  being  made  in  the  shop  and 
the  men  engaged  on  it  should  be  carefully 
sized  up. 

4 — A  means  should  be  provided  for  listing 
the  work  as  planned. 

5 — In  selecting  the  work,  the  six  considera- 
tions under  the  element  planning  should  be 
brought  into  play. 

6 — If  more  than  one  job  is  selected  for  a 
man,  attention  should  be  given  to  the  order 
in  which  they  are  to  be  made,  as  in  this  way 
it  will  be  known  what  work  to  get  ready 
first. 

7-  -The  core-room  foreman  should  note 
carefully  the  selections,  so  he  may  have  the 
important  core  boxes  sent  in  first. 

8 — The  flask  boss  should  note  what  flasks 


236  MAXIMUM     PRODUCTION 

will  be  necessary  for  the  various  jobs  that  are 
planned. 

9-  -The  labor  boss  should  note  what  rig- 
ging will  be  necessary,  so  that  he  can  get 
at  work  as  soon  as  the  planning  is  over  with. 

10 — A  means  should  be  provided  for  mark- 
ing the  patterns  with  the  names  of  the  men 
who  are  to  make  them. 

11-  -The  pattern-storage  man  should  set 
apart  from  the  patterns  available  such  as 
have  been  scheduled  for  making. 

With  the  above  consideration  given  to  the 
planning,  we  can  next  consider  the  third  ele- 
ment of  dispatching — execution.  As  was 
previously  pointed  out,  this  is  made  up  of 
three  steps — knowledge  of  the  plans  made, 
the  preparation  for  carrying  them  out,  and 
carrying  out  the  plans  as  per  schedule. 

KNOWLEDGE  OF  THE  PLANS  MADE. — Any 
plan  for  betterment,  in  order  to  be  produc- 
tive of  results,  must  take  into  consideration 
the  importance  of  a  general  understanding 
of  things.  Several  persons  may  be  involved, 
and  unless  the  relation  to  each  of  the  whole 
scheme  of  things  is  clearly  outlined,  there  is 
certainly  going  to  be  confusion,  the  same  as 


EFFICIENT  DISPATCHING  IN  THE   FOUNDRY       237 

there  would  be  confusion  on  a  railroad  (or 
even  worse,  a  serious  wreck),  if  there  existed 
any  doubt  as  to  a  correct  understanding  of 
the  orders  that  may  have  been  issued.  With 
this  in  mind,  the  idea  of  presenting  the  plans 
made  to  those  interested,  in  some  convenient 
form  for  reference  purposes,  is  therefore 
self-suggestive.  This  should  be  done  as  soon 
after  the  work  of  planning  as  possible,  in 
order  to  give  those  concerned  the  schedule 
of  work  so  that  they  will  have  plenty  of  time 
in  which  to  give  proper  consideration  to 
the  next  step. 

PREPARATIONS  FOR  CARRYING  OUT  THE 
PLANS. — An  analysis  of  this  will  show  that  it 
divides  into  the  following: 

1-  -The  patterns. 

2-  -The  cores  to  be  made. 

3-  -The  flasks  to  be  located,  repaired    or 
changed. 

4-  -The  rigging  to  be  brought  in  and  the 
necessary  changes  made. 

5 — Special  features  looked  into;  for  in- 
stance, special  gaggers,  rods,  clamps. 

6 — Changes  in  conditions  to  facilitate  the 
particular  work  coming  in. 

7- -The  work  at  night. 


238  MAXIMUM     PRODUCTION 

PATTERNS.  -  -  Small  patterns  should  be 
brought  into  the  foundry  on  the  afternoon 
previous  to  making  and  placed  in  racks  for 
the  men.  Large  patterns  should  be  brought 
in  toward  night  and  be  arranged  in  some 
convenient  place  from  which  point  they  can 
be  easily  handled. 

CORES. — As  soon  as  possible  after  the 
planning,  the  core-room  foreman  should  see 
to  it  that  the  most  important  core  boxes  are 
sent  in  so  that  his  force  can  begin  on  them 
without  delay.  As  soon  as  he  gets  his  sched- 
ule showing  the  planning  in  detail,  he.  can 
have  the  rest  of  the  boxes  brought  in  and 
the  cores  made  in  the  order  in  which  they 
are  scheduled  to  be  used. 

FLASKS. — The  man  in  charge  of  the  flasks 
should  ascertain  what  is  necessary  to  take 
care  of  the  work  coming  in.  Flask  parts 
that  may  have  been  previously  made  should 
be  assembled;  those  needing  chucking  or 
changes  in  the  barring  should  be  promptly 
attended  to,  the  necessary  patterns  to  be 
taken  from  the  pattern  storage  for  this  pur- 
pose. If  repairs  are  needed  they  should  be 
made  at  once. 


EFFICIENT  DISPATCHING  IN  THE  FOUNDRY       239 

RIGGING.-  -Rigging  in  the  way  of  plates, 
rings,  arbors,  etc.,  should  be  brought  in  and 
the  necessary  changes  made  so  that  they  will 
be  available  when  wanted.  Only  in  very  rare 
instances  should  a  moulder  have  to  wait  until 
an  arbor  or  a  ring  is  looked  up  and  brought 
into  the  shop. 

SPECIAL  FEATUKES. — If  special  gaggers, 
rods,  or  clamps  will  be  needed,  they  should 
be  made  on  the  day  previous  so  as  to  be  in 
readiness  when  wanted. 

CONDITIONS. — Changes  in  conditions  should 
not  be  slighted.  A  job  may  take  a  special 
mix  of  sand;  a  pit  may  have  to  be  dug;  a 
large  amount  of  heap  sand  may  be  needed; 
brick  may  be  used,  or  something  else  possi- 
bly varying  from  the  ordinary  method  of 
procedure  may  have  to  be  done,  and  the 
time  to  do  it  is  certainly  not  when  the 
moulder  is  at  work. 

NIGHT  WORK.-  -The  man  in  charge  of  the 
night  force  should  be  informed  as  to  his 
share  of  the  work  necessary  to  carry  out  the 
procedure  as  scheduled.  Castings  should  be 
shaken  out  and  taken  to  the  cleaning  floor; 
gaggers  removed  from  the  sand  heap  and 


240  MAXIMUM     PRODUCTION 

placed  on  the  back  end  of  the  floors;  sand 
tempered  and  put  in  condition  for  use  by  the 
moulders  in  the  morning,  and  the  flasks  not 
needed  by  the  men  taken  from  their  floors. 
Pits  should  then  be  dug,  according  to  the 
sizes  needed  for  the  work  to  be  made  in  them. 
At  any  rate,  a  proper  knowledge  of  the 
plans,  plus  careful  preparations,  will  assist 
materially  in  getting  everything  in  readi- 
ness. There  is  no  excuse,  except,  perhaps, 
in  the  case  of  breakdown  jobs,  for  work  to 
be  held  up  because  something  has  been  over- 
looked. Wise  planning  will  see  further  than 
the  day  following — it  will  look  two  or  even 
three  days  ahead  so  that  if  a  flask  has  to 
be  made  or  rigging  planned,  the  work  can 
be  begun  a  day  or  two  previous  to  schedul- 
ing the  jobs. 

CARRYING  OUT  THE  PLANS  AS  PER  SCHEDULE. 

-This  is  a  subject  of  vast  importance. 
Planning  in  itself  may  be  careful  and  thor- 
ough; preparations  to  carry  plans  out  may 
be  up  to  standard,  but  unless  the  actual  pro- 
cedure is  one  which  does  things  according  to 
the  schedule,  the  results  will  not  be  forth- 
coming. 

In  the  first  place,  the  first  hour  or  so  in 


EFFICIENT   DISPATCHING   IN   THE   FOUNDRY     24:1 

the  morning'  is  really  the  most  important  time 
in  the  day.  There  are  a  lot  of  men  to  be 
attended  to ;  flasks, patterns  and  rigging  must 
be  distributed,  and  it  cannot  all  be  done  at 

*  * 

once  or  to  advantage  unless  there  is  some 
organized  arrangement.  The  following  plan, 
therefore,  seems  to  fit: 

1-  -The  night  force,  after  the  regular  night 
work  as  outlined  is  done,  should  (according 
to  the  schedule  furnished  the  night  foreman) 
place  on  the  moulders'  floors  the  large  flasks 
that  are  to  be  used,  in  which  should  be  placed 
the  large  patterns.  If  pits  are  to  be  used, 
the  patterns  should  be  placed  near  them. 
This  will  lighten  the  work  of  the  cranes  to 
quite  a  degree. 

2 — About  a  half-hour  before  the  regular 
starting  time  in  the  morning,  the  laboring 
force  should  report  and  distribute  the 
smaller  patterns  and  flasks. 

3 — As  soon  as  work  is  begun  in  the  morn- 
ing, whatever  may  be  necessary  in  the  way 
of  rigging  should  be  taken  to  the  floors. 

4- -A  man  should  be  placed  in  charge  of 
the  laboring  men,  whether  they  directly  as- 
sist moulders  or  not,  to  whom  the  moulders 
can  make  known  their  wants  and  he  should 


242  MAXIMUM     PRODUCTION 

be  held  responsible  for  seeing  to  it  that  they 
get  what  they  want  as  quickly  as  possible. 

5-  -There  should  be  a  regular  place  for  the 
supplies,  etc.,  listed  previously,  and  the 
knowledge  of  their  location  should  be  in  pos- 
session of  all  concerned. 

6 — Facing  sand  (which  should  be  mixed  in 
advance)  should  be  kept  at  each  moulder's 
floor  and  replenished  as  necessary  before 
(not  after)  the  men  may  need  some. 

7-  -The  labor  foreman  should  keep  care- 
ful watch  over  the  needs  of  the  men  as  to 
copes.  There  is  no  excuse  for  a  moulder 
asking  for  his  cope  only  to  find  that  it  is  at 
the  bottom  of  a  pile. 

8- -The  moulders  should  be  kept  supplied 
with  tools  and  equipment  and  should  report 
when  they  need  such  things.  I  recently  saw 
a  moulder  trying  to  mend  a  mould  in  the 
dark.  Some  one  had  stolen  his  torch  and  he 
was  afraid  to  mention  the  matter  for  fear 
of  being  called  down  for  his  carelessness. 
There  is  certainly  no  money  in  such  a  state 
of  affairs. 

9 — Cores  should  be  furnished  the  men  in 
advance  of  their  requirements.  They  should 
never  be  made  to  go  for  them. 


EFFICIENT   DISPATCHING  IN   THE   FOUNDRY     243 

10 — The  crane  service  should  be  watched 
very,  very  carefully.  "A  whole  mouthful," 
a  foundry  foreman  recently  said  when  this 
was  mentioned  to  him.  True,  but  a  study 
and  ingenuity  will  find  ways  to  keep  the  de- 
lays due  to  crane  waits  at  a  surprisingly  low 
point. 

11-  -The  general  shop  labor  should  be 
made  to  jump  quickly  when  moulders  want 
things,  such  as  gaggers,  clamps,  etc.  The 
idea  is  to  save  time,  and  if  two  steps  can  be 
taken  instead  of  one,  things  will  be  further 
ahead. 

12 — It  should  be  a  rule  that  no  work  is  to 
be  done  by  moulders  or  coremakers  that  can 
be  done  at  less  expense  by  those  less  skilful. 

A  pretty  large  contract  this!  Certainly — • 
an  ideal  state  of  affairs — an  ideal  that  many 
a  foundry  can  come  within  reaching  distance 
of,  if  the  work  is  properly  organized,  in  the 
hands  of  a  hustler,  and  every  one  made  to 
do  his  part.  It  means  work,  of  course,  but 
no  one  ever  accomplished  anything  worth 
while  by  weak,  half-hearted  trying. 

Why  necessary?  To  save  time  that  can  be 
utilized  in  turning  out  castings.  Do  not 
count  by  the  usually  accepted  standards — 


244  MAXIMUM     PRODUCTION 

the  hours  time  or  the  wages  expended  per 
hour — but  by  the  pounds  you  can  produce  in 
every  hour  saved  at  the  value  per  pound. 
Your  men  are  your  investment  on  which  you 
win  or  lose.  Arrange  it  so  that  they  can 
work  to  the  best  advantage,  and  you  are  as- 
sured excellent  dividends  in  extra  tonnage. 
They  will  not  only  like  it,  but  will  show  their 
appreciation  by  exerting  themselves  in  order 
to  stay  with  such  a  progressive  concern. 
You  will  like  it,  too,  for  after  all  you  measure 
your  likes  and  dislikes  in  the  foundry  busi- 
ness by  the  size  of  your  bank  account  after 
you  balance  up.  The  suggested  procedure 
will  help  you  to  increase  it. 


CHAPTER  XII 
HANDLING   SHOP   DETAILS 

" T>  E  sure  you  are  right,  then  go  ahead' 

a  bit  of  advice  as  applicable  to  the 
foundry  industry  as  to  the  individual, 
for  if  the  business  of  the  foundry  is  to  get 
its  share  of  work  at  right  prices,  and  make 
it  at  a  figure  which  will  net  a  reasonable 
profit,  then  it  is  essential  that  attention  be 
given  to — 

1 — A  definite  method  of  procedure. 

2 — Action  according  to  the  procedure  out- 
lined. 

A  f  oundryman  once  came  at  me  with — '  *  If 
you  white-collared  gentry  would  once  get  out 
here  in  the  thick  of  things,  you  would  soon 
cease  your  ranting  about  how  a  foundry 
should  be  run.  I'm  doing  all  the  jumping 
around  I  can,  but  the  result  seems  to  be  a 
slam  at  this  and  a  kick  at  that  performance.' 
I  replied  that  his  criticism  was  a  fair  one; 
that  knowing  how  he  was  hampered  because 
of  the  conditions  under  which  he  was  work- 

245 


246  MAXIMUM     PRODUCTION 

ing,  there  was  certainly  little  use  of  kicking 
without  offering  at  the  same  time  some  good 
workable  suggestions  aimed  to  boost  things 
along. 

A  few  years  ago  I  saw  the  written  in- 
structions given  to  the  superintendent  of  a 
large  concern  at  the  time  he  assumed  charge, 
and  the  whole  proposition  was  nothing  but 
generalities  indicated  by  about  150  words. 
No  specific  instructions ;  no  details  of  what 
he  was  to  do  or  how  far  he  was  to  go. 

I  have  known  good  shop  managers  to  make 
every  effort  to  obey  the  order  "maximum 
production  in  the  shortest  time  and  at  the 
lowest  cost" — who  were  not  able  to  carry 
on  their  work  properly  because  of  the  con- 
ditions under-  which  they  were  working.  In 
other  words,  quality  of  work  was  sacrificed 
for  quantity. 

If  a  shop  manager  is  supposed  to  be  a 
mind  reader,  to  sense  out  what  is  required 
of  him;  to  be  a  chaser,  going  after  this,  look- 
ing up  that,  devoting  his  time  to  details  that, 
while  important  in  themselves,  keep  him 
from  attending  to  more  urgent  matters — 
don't  hold  him  responsible  if  he  fails  to 
make  good — if  the  management  knows  what 
constitutes  "making  good."  If,  however,  the 


HANDLING    SHOP    DETAILS  247 

idea  is  not  merely  "he  is  supposed  to  know 
his  business, ' '  but  "  it  is  our  place  to  tell  him 
what  his  business  is  to  be/ '  plus  an  arrange- 
ment whereby  he  can  devote  a  good  share 
of  his  time  to  planning  and  scheming,  study- 
ing his  men,  his  work  and  his  conditions, 
then  it  is  a  safe  bet  that  unless  he  is  incompe- 
tent (which  would  show  in  a  very  short  time) 
he  will  not  have  to  be  "  carpeted "  many  times 
in  a  year. 

The  effort  to  get  away  from  this  unfair- 
ness, this  shifting  of  the  responsibility,  this 
hand-washing  process,  has  led  me  to  sur- 
round the  shop  manager  with  such  assistance 
as  will  enable  him  to  be  a  manager — not  an 
apology  for  one.  This  means  not  only  "the 
fair  deal,"  not  only  better  relations  between 
man  and  management,  but  greatest  of  all- 
maximum  results. 

An  analysis  of  foundry  work  will  show 
that  the  making  of  castings  is  separable  into 
the  following  elements: 

A. — Eeceipts  of  orders 

B. — Orders  to  the  foundry 

C. — Making- 

Eigging 

Cores 

Moulds 


248  MAXIMUM     PRODUCTION 

D. — Casting- 
Melting 
Pouring 

E. — Night  work 

F. — Cleaning  and  inspection 

G. — Shipping. 

Each  one  of  these  seven  elements  is  a  fac- 
tor in  efficient  management,  and  must  receive 
its  share  of  attention.  A  prominent  foun- 
dryman  once  told  me  that  every  customer 
was  a  "preferred"  customer,  and  that  it  was 
necessary  for  him  to  be  in  possession  of 
such  information  as  would  enable  him  to 
supply  any  of  them  with  the  details  regard- 
ing their  work  "right  off  the  bat.'  Unless 
he  could  do  this,  he  could  not  convince  them 
that  he  was  looking  after  their  interests. 
The  arrangement  must  therefore  be  de- 
signed to  take  proper  care  of  these  elements 
and  at  the  same  time  supply  those  interested 
with  the  necessary  facts — not  after  digging 
into  records  for  an  hour,  lout  at  once. 

In  a  general  way  any  efficient  shop  method 
must  be  designed  with  these  considerations 
in  view :  It  must  furnish  a  maximum  amount 
of  information  at  a  minimum  expenditure  of 
time  and  money;  it  must  provide  the  execu- 
tive with  a  proper  follow-up  arrangement; 


HANDLING    SHOP    DETAILS  249 

it  must  reflect  the  conditions  in  the  shop  at 
all  times  as  regards  both  production  and 
cost ;  it  must  be  elastic  in  order  to  fit  the  re- 
quirements of  any  foundry  or  the  wishes 
of  the  executive;  it  must  furnish  informa- 
tion which  is  on  tap  and  in  serviceable  form ; 
it  must  supply  clear  and  concise  records  as 
to  results  daily,  weekly,  and  monthly.  In 
short,  it  must  be  designed  to  provide  the 
executive  with  the  means  of  conducting  his 
business  "to  the  machine-shop  door'  with 
the  same  care  that  is  usually  exercised  "from 
the  machine-shop  door.' 

While  a  hard  and  fast  rule  can  never  be 
laid  down  for  any  specific  case  without  a 
good  knowledge  of  conditions,  the  following 
is  an  outline  of  a  procedure  which  can  be 
varied  to  suit  requirements.  If  the  foundry- 
man  finds  it  difficult  to  decide  what  he  really 
wants,  outside  advice  should  be  secured  so 
that  he  will  get  the  best  arrangement  for  his 
particular  business. 

To  start  at  the  beginning:  Upon  receipt 
of  orders  from  customers,  the  first  step  is 
their  proper  numbering.  Each  order  should 
have  a  separate  and  distinct  number  for 
identification  purposes,  and  in  addition  a 
number  to  designate  the  particular  class  of 


250  MAXIMUM     PRODUCTION 

work,  which  can  be  termed  "symbol  num- 
bers.' Order  numbers  should  be  assigned 
with  reference  to  the  elements  outlined  in 
the  fourth  chapter,  as  follows : 

Special  work  for  customers .  .  1,000-1,999 

Maintenance    2,000-2,999 

.    New  Construction   ....3,000-3,999 

Bee"  onstruction  4,000-4,999 

Expense   5,000-5,999 

Commercial  Production 6,000-9,999 

The  first  figure  of  any  number  shows  at  a 
glance  the  kind  of  work  covered.  Symbol 
numbers  may  be  alphabetical  and  numerical 
for  the  number  of  times  letters  have  been 
used.  As  an  example,  Smith,  Jones  &  Com- 
pany may  order  castings  four  times  during 
the  month,  and  we  may  assume  the  number- 
ing to  be- 

Symbol— K2 ; 

Orders— 6,125,  6,210,  6,225,  6,304. 

While  the  numbering  looks  complex,  it  has 
proven  efficient  in  foundry  production  and 
cost  accounting.  Classification  according  to 
the  symbol  K2  at  the  end  of  the  month  will 
give  production,  time  and  cost  of  castings 
for  Smith,  Jones  &  Company  without  refer- 
ence to  order  number  or  specific  casting. 


HANDLING    SHOP    DETAILS 


251 


Sorting  will  give  weight,  time  and  cost  by 
order  numbers.  If  No.  6,125  includes  twenty 
fly-wheels,  sorting  and  totaling  would  give' 
the  information  for  them.  In  this  way  we 
have  all  the  essentials  necessary  to  cost  of 
any  casting  or  order  made  without  having  to 
compile  it  in  each  instance. 

After  the  order  has  been  properly  num- 
bered, it  is  obvious  that  the  customer 's  order 
must  be  converted  into  an  order  which  those 
interested  can  use  for  getting  out  the  work. 
A  simple  and  efficient  form  is  shown  in  Fig- 
ure 25,  which  should  be  made  in  triplicate 


n»*.       ,            Orirr 

Nff 

_A 

v> 

tthrn                                    Their  Ofdtff 

^^ 

Des. 

Totals, 

Shipped 

No.Pieces 

Weieht 

Des. 

Shipped 

No.Pieces 

Weight 

Des. 

Shipped 

No.Pieces 

Weight 

Des. 

Shipped 

No.Pieces 

Weight 

Des. 

Shipped 

^jj^K 

No.Pieces 

^^F 

Weizht 

Des. 

Shipped 

No.Pieces 

Weizht 

TV  ffnfffneerfi 

i9Jfaffa«<iw 

FIG.    25.       FORM    FOB    WORK    ORDER. 


252  MAXIMUM     PRODUCTION 

for  final  delivery  as  follows:  One  copy  to 
shop  superintendent;  one  copy  to  shipping 
department;  one  copy  as  office  record — all 
to  be  filed  according  to  customer. 

The  orders  are  now  properly  numbered 
and  issued.  What  is  the  next  step  ?  To  start 
in  and  make  the  castings  from  the  informa- 
tion as  we  find  it,  or  to  go  a  step  farther  and 
furnish  the  shop  management  with  addi- 
tional assistance?  It  is  true  that  the  fore- 
man knows  what  is  to  be  made.  He  could 
go  out  to  the  pattern  house,  get  the  pattern, 
and  give  it  to  a  moulder.  The  moulder  could 
get  a  flask,  make  the  mould,  and  pour  it. 
The  casting  could  be  cleaned  and  shipped, 
and  the  transaction  would  be  ended.  But  if 
we  multiply  these  performances  by  the  num- 
ber of  jobs  that  run  through  the  foundry 
during  the  course  of  a  day,  we  should  find  a 
most  unscientific  state  of  affairs,  due  to  the 
confusion  that  would  exist.  A  more  efficient 
management  is  therefore  absolutely  neces- 
sary. 

The  first  thing  to  do  is  to  provide  a  place 
from  which  point  the  details,  as  outlined  in 
the  chapter  on  '  *  Dispatching, ' '  can  be  prop- 
erly handled.  This  should  be  located  so  that 
it  can  be  reached  easily  by  the  men  in  the 


HANDLING    SHOP    DKTAILS  253 

shop,  and  it  can  be  called  the  "Dispatching 
Office." 

To  get  the  work  started  properly,  the  copy 
of  the  order  (Figure  25)  intended  for  the 
shop  superintendent  should  be  sent  to  the 
dispatching  office  and  the  one  for  the  shipper 
to  the  pattern  house. 

The  person  in  charge  of  the  pattern  house 
should  note  the  orders  received  and  make  out 
a  small  card  for  each  pattern,  on  which  is  to 
be  entered  the  information  necessary  to  iden- 

mi 

tify  it  properly,  the  reverse  side  of  this  card 
being  gummed  for  attaching  to  the  patterns. 
He  should  then  look  over  his  patterns,  lay- 
ing out  such  as  are  readv  for  sending  into 

•/  <^_r> 

the  foundry ;  to  these  should  be  pasted  these 
small  cards,  and  over  them  should  be  applied 
a  coating  of  shellac,  to  make  reading  an  easy 

/  o  */ 

matter  when  the  patterns  are  in  use. 

If  it  happens,  as  it  often  does,  that  he  has 
cards  covering  patterns  that  will  have  to  be 
made,  altered,  or  repaired,  he  should  make 
out  an  "exception'  report  covering  such 
work,  sending  this  report  to  the  dispatching 
office,  filing  the  cards  he  holds  in  his  office. 
As  patterns  of  the  kind  just  mentioned  be- 

• 

come  ready  for  delivery  (gummed  cards  for 
which  he  has  on  file),  a  report  is  made  out 


254 


MAXIMUM   PRODUCTION 


which  accompanies  the  " exception'    report. 
So  much  for  the  pattern-shop  procedure. 

As  the  foundry  is  concerned  with  time  con- 
sumed on  work,  production,  rejections,  and 
efficiencies,  we  must  provide  some  means  to 
link  these  together.  To  do  this  to  advantage 
we  must  provide  a  card  which  can  be  used 
in  dispatching,  for  costing,  by  the  men  in  the 
shop,  as  an  order,  etc.  Such  a  card,  which 
can  be  called  a  "tally'  card,  may  be  ar- 
ranged as  shown  in  Figure  26.  It  should  be 
written  in  triplicate  for  moulders  and  in  du- 
plicate for  all  other  employees,  and  be  han- 
dled as  will  be  outlined  later. 


FOUNDRY  TALLY  CARD 


Symbol  No 


Order  No. 


Acct.No. 


Issued 


No.Reo,'d. 


Patt  No 


Wanted 


DESCRIPTION 


Machine  No. 


Floor  No. 


Pieees  to  Flask 


Dept. 


Cast 


Not  Cast 


Standard  Time 


Actual  Time 


Schedule 
No. 


St'd  Time 
Per 


Total 

St'd 

Time 


Men 


Quit 


Started 


Elapsed 


Allow 


Total 
Act.Time 


Men 


Cost 


Rate 


Amount 


PRODUCTION 


INSPECTION 


SHIPMENT 


No.To 
Do 


Finished 


Balance 


Oood 


To  be 
Replaced 


Wei£b.t 


Bad 


Weight 


Shipped 


Via 


Billed 


FIG.     26.       FOUNDRY    TALLY    CARD. 


HANDLING    SHOP    DETAILS  255 

In  connection  there  are  three  things  which 
should  be  carefully  considered: 

1-  -What  is  being  made ; 

2-  -What  should  be  made  next ; 

3 — What  constitutes  the  work  to  follow  and 
the  order  in  which  it  should  be  made. 

This  suggests  the  idea  of  providing  a 
means  for  properly  filing  these  cards  as  they 
are  made  out.  They  can  be  filed  in  card 
files,  although  the  best  arrangement  would 
be  the  use  of  a  large  board,  so  that  every- 
thing would  be  in  plain  view. 

In  addition  to  this,  the  dispatching  office 
should  be  provided  with  three  card  files, 
marked : 

1 — Current  day; 

2-  -Unavailable ; 
3 — Available. 

Upon  receipt  of  orders  received,  as  shown 
by  the  superintendent's  copy  sent  to  the  dis- 
patching office,  this  office  should  at  once  make 
out  a  card  in  triplicate  for  each  pattern 
called  for,  filing  these  in  the  tray  labeled 
"Current  Day";  after  this  the  copy  of  the 
order  should  be  forwarded  to  the  proper  per- 
son. When  the  "exception'  report  conies 
in  from  the  pattern  house,  designating  the 


256  MAXIMUM     PRODUCTION 

patterns  that  are  not  laid  out,  the  dispatch- 
ing office  takes  the  cards  from  the  file  men- 
tioned, sorts  out  the  ones  listed  in  the  "  ex- 
ception "  report  and  places  them  in  the  "un- 
available" file,  while  the  balance  (which  are 
ready  for  the  foundry)  are  placed  in  the 
"available'7  file.  From  the  auxiliary  report 
from  the  pattern  house,  accompanying  the 
"exception7  report  and  covering  patterns 
that  since  the  date  of  the  original  order  have 
been  made,  repaired  or  altered,  the  dispatch- 
ing office  learns  which  cards  may  be  removed 
from  the  "unavailable"  file  and  filed  with 
the  ones  covering  "available7  work.  These 
cards  should  be  classified  by  class  of  work 
and  by  symbol  and  order  number. 

As  work  is  planned  and  scheduled,  the  cor- 
responding "tally7  cards  which  are  on  file 
in  the  "available77  are  to  be  removed  and 
properly  distributed  on  the  board  mentioned, 
according  to  the  schedule  adopted  by  those 
responsible  for  the  planning.  We  are  now 
ready  for  shop  operation,  up  to  ivhich  point 
everything  should  have  been  properly 
planned  and  laid  out. 

When  men  begin  work  in  the  morning, 
they  should  report  to  the  dispatching  office 
for  "tally77  cards,  which  should  be  on  the 


HANDLING    SHOP    DETAILS  257 

boards  classified  as  "available  work  to  be 
started  next/  The  starting  time  should  be 
entered,  the  triplicate  copy  given  to  the  men, 
and  the  other  two  copies  filed  together  as 
"work  being  made.7  As  this  is  being  done, 
the  top  "  tally '  card  in  triplicate  of  those 
classified  as  "work  to  follow'  should  be 
moved  up  to  file  for  "available  work  to  be 
started  next.' 

As  men  complete  their  work,  they  are  to 
return  to  the  dispatching  office  with  their 
triplicate  copies.  The  corresponding  copies 
are  to  be  removed  from  the  boards,  the  fin- 
ishing time  entered,  the  number  completed, 
and  the  date;  the  tickets  for  the  next 'job  are 
then  issued  to  the  man  and  a  new  "tally' 
card  is  made  out  to  cover  the  balance  to  be 
made  shown  on  the  card  just  turned  in — this 
to  be  properly  filed  according  to  the  plan- 
ning. All  cards  should  show  account  num- 
bers as  outlined  in  Chapter  XIV.  The  origi- 
nal and  duplicate  of  all  cards  turned  in  are 
to  be  sent  to  the  office,  while  the  triplicate 
is  to  be  sent  to  the  shipping  department. 

This  department  should  have  two  files,  ar- 
ranged as  follows: 

A — For  "work  coming  through.' 

B — For  "castings  on  hand." 


258  MAXIMUM     PRODUCTION 

These  are  indexed  by  symbol  numbers  and 
sub-indexed  in  some  cases  by  name  of  pat- 
tern, as,  for  instance,  beds,  cylinders,  pulleys, 
etc.,  for  customers  whose  work  amounts  to 
quite  a  little.  The  clerk,  upon  receipt  of  the 
triplicate  cards  covering  work  made,  files 
them  according  to  symbol  number,  by  pat- 
tern number,  by  date  in  the  file  for  "work 
coming  through" — an  inventory  of  what  is 
going  on.  As  received,  these  cards  do  not 
show  entries  covering  number  and  weight  of 
the  pieces  good,  the  pieces  bad,  or  the  cost 
postings. 

On  the  day  following  the  making  of  the 
work  and  after  the  castings  have  been 
cleaned,  the  inspector  takes  the  file  for  "work 
coming  through,'  weighs  up  the  good  cast- 
ings and  enters  on  the  proper  card  the  num- 
ber and  weight  under  "good";  these  cards 
are  placed  in  the  front  of  the  file.  *  After 


*  It  might  be  well  to  state  that  the  slips  placed  in  the 
front  of  the  file  by  the  inspector  include  the  cards 
covering  the  work  rejected,  for  the  reason  that  such 
work  ceases  to  be  ''work  coming  through,"  and  while 
not  "castings  on  hand,"  should  be  first  posted  to  the 
corresponding  cards  in  the  office  and  then  placed  in  the 
file  for  "castings  on  hand"  in  order  that  the  shipping 
clerk  may  know  that  the  work  was  made,  but  proved 
defective.  When  the  cards  covering  the  work  replacing 
the  bad  come  through,  those  covering  the  bad  are  taken 
up  and  destroyed. 


HANDLING    SHOP    DETAILS  259 

this  is  done,  lie  proceeds  to  make  out  a  re- 
jection report  covering  the  castings  which 
do  not  pass  inspection,  marking  -the  number 
rejected  under  "bad."  These  also  are  filed 
in  the  front  of  the  file.  The  file  is  then  re- 
turned to  the  shipping  department. 

This  "rejection"  report  should  show  what 
is  rejected;  who  made  the  work;  complete 
information  as  to  cause  for  rejection;  wheth- 
er the  work  is  to  be  replaced  or  not,  and 
whether  or  not  the  moulder  who  made  the 
work  is  to  receive  credit  for  the  rejected 
work. 

The  procedure  after  the  inspection  is  as 
follows : 

1.  The  "tally"  cards,  covering  the  work 
inspected  and  classed  as  good  or  bad,  are 
sent  to  the  office,  where  the  entries  as  to  in- 
spection results  are  transferred  to  the  corre- 
sponding tally  cards  (still  kept  in  duplicate) 
as  sent  in  from  the  dispatching  office,  after 
which  the  triplicate  copies  are  sent  back  to 
the  shipping  department  for  proper  distribu- 
tion in  the  file  for  "castings  on  hand." 

2.  The  "rejection'    cards  are  sent  to  the 
one  in  charge  of  the  foundry,  so  that  he  can 
see  what  was  lost  and  why,  and  investigate 
if  he  desires;  after  which  he  is  expected  to 


260  MAXIMUM     PRODUCTION" 

0.  K.  any  credits  to  men  for  spoiled  work  if 
they  were  not  responsible.  The  cards  are 
then  sent  to  the  dispatching  office. 

The  dispatching  office,  upon  receipt  of  the 
rejection  cards,  must  note  the  number  re- 
jected on  each  of  the  various  orders,  and  if 
the  orders  covered  have  not  been  completed, 
the  proper  entries  are  to  be  made  on  "  tally " 
cards  on  the  boards,  under  the  heading  "to 
be  replaced. '  If  the  order  has  been  com- 
pleted, a  new  card  is  to  be  made  out;  the 
pattern  house  is  notified  and  the  work 
planned  in  the  regular  way.  This  arrange- 
ment will  enable  any  foundry  to  keep  a  true 
and  accurate  account  of  castings  made  and 
to  be  replaced — a  point  of  importance,  as 
keeping  track  of  the  number  of  good  cast- 
ings made  is  often  a  confused  proposition. 

When  castings  are  ready  for  shipment,  the 
corresponding  slips  are  removed  from  the 
"castings  on  hand'  file,  marked  with  the 
date  of  shipments  and  the  routing,  and  as 
soon  as  the  shipment  is  made,  are  sent  to 
the  office,  where  they  are  then  used  as  the 
authority  for  rendering  invoices  to  the  cus- 
tomers. It  often  happens  that  the  shipping 
clerk  wants  to  make  a  shipment  as  soon  as  a 
casting  is  cleaned,  or  a  casting  will  be  rushed 


HANDLING    SHOP    DETAILS  261 

from  the  foundry,  cooled,  cleaned  as  quickly 
as  possible  and  shipped.  In  such  cases,  the 
shipping  clerk  takes  the  triplicate  " tally'7 
card  from  the  "work  coming  through "  file, 
enters  the  proper  information,  and  sends  it 
through  the  office,  for  noting,  to  the  billing 
clerk  for  invoicing. 

Let  us  consider  for  a  moment  some  of  the 
special  conditions  this  arrangement  takes 
care  of.  Assume  that  a  casting  has  been 
started,  but  that  it  has  not  been  completed 
at  casting  time.  The  card  as  turned  in 
would  show  that  no  pieces  were  made  and 
that  nothing  was  cast  and  would  be  filed  in 
the  "work  coming  through"  file,  reference  to 
which  would  show  that  the  work  was  started 
but  not  completed.  We  will  assume  that  on 
the  day  following  a  workman  spends  four 
hours  finishing  up  the  job,  which  is  cast  the 
same  night.  The  card  would  be  turned  in 
properly  marked,  forwarded  to  the  shipping 
department,  and  filed  in  front  of  the  slip  for 
the  previous  day.  On  the  day  following, 
when  the  casting  is  inspected  and  reported 
as  good,  this  information  would  be  posted  to 
the  card  covering  completion  and  sent  to  the 
office  for  entry,  while  the  one  covering '  the 
starting  of  the  job,  which  is  no  longer  of  any 


262  MAXIMUM     PRODUCTION" 

use,  is  destroyed  by  the  shipping  clerk.  Here 
we  have  a  complete  history  of  the  transac- 
tion, for  we  have,  first,  knowledge  that  the 
work  was  started  but  not  completed;  then 
completed  and  cast  but  not  inspected,  and 
finally  inspected,  reported  as  good,  and  ready 
for  shipment.  From  this  it  can  be  seen  that, 
regardless  of  the  time  taken  to  make  work, 
the  shipping  department  will  have  this  in- 
formation on  file. 

Let  us  consider  a  case  where  a  large  cast- 
ing is  made  and  cast  the  day  it  was  started, 
although  it  remains  in  the  sand  during  the 
following  day.  The  card  would  be  filed  as 
' '  work  coming  through, ' '  and  would  be  taken 
with  the  others,  in  order  to  post  the  results 
of  the  inspection.  In  going  through  the  list, 
the  inspector  finds  that  no  such  casting  is  on 
the  cleaning  floor.  He  therefore  marks  it 
with  an  N,  denoting  "not  on  cleaning  floor," 
places  it  back  in  its  proper  place  in  the  file, 
and  if  any  reference  is  made  to  it,  the  card 
will  show  that  it  was  made  and  cast  and  that 
the  casting  was  not  delivered  from  the  foun- 
dry. This  also  applies  to  cases  where  work 
is  made  and  checked  as  cast  but  not  poured 
because  of  a  shortage  of  iron. 

In  cases  where  castings  which  have  been 


HANDLING    SHOP    DETAILS  263 

reported  as  good  (slips  for  which  are  in 
the  " castings  on  hand'  file)  are  subse- 
quently found  defective  before  shipment,  the 
cards  are  removed,  marked  "scrapped,"  and 
sent  to  the  office  for  charging  to  the  scrap 
account  for  the  scrap  value,  while  the  cast- 
ings would  either  be  taken  to  the  scrap  pile 
or  the  cupola. 

Now  as  to  the  office  procedure :  After  the 
transfer  to  the  original  and  duplicate 
"  tally '  cards  of  the  information  contained 
on  the  triplicate  received  from  the  shipping 
department,  the  cards  are  checked  against 
the  "in"  and  "out'1  clock  time  cards,  in  or- 
der to  balance  the  times  as  shown,  after 
which  they  are  rated  and  extended.  The 
cards  are  then  separated  and  the  originals 
filed  according  to  symbol  or  order  numbers 
and  classed  as  moulding  labor,  while  the  du- 
plicates are  sent  to  the  efficiency  department 
-if  there  happens  to  be  such  a  progressive 
department  in  the  scheme  of  things. 

As  the  cards  covering  core  and  general 
labor  would  be  sent  to  the  office  direct  from 
the  dispatching  office,  rated  and  extended 
and  properly  filed,  it  follows  that  we  have 
the  cost  of  all  labor  properly  classified.  At 
any  time  during  the  month,  required  infor- 


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HANDLING    SHOP    DETAILS  265 

mation  could  easily  be  ascertained,  while  at 
the  end  of  the  month,  the  productive  mould- 
ing time  and  cost  and  all  burden  costs  could 
be  determined,  the  necessary  rates  calculated 
and  reports  covering  orders,  castings  or  sym- 
bols made  out  as  shown  in  Figure  27. 

Let  us  see  what  the  method  really  accom- 
plishes : 

1.  It  shows  what  is  available  and  not  avail- 
able. 

2.  It  shows  what  is  being  worked  on. 

3.  It  shows  what  is  to  be  made  next. 

4.  It  acts  as  the  means  of  tallying  up  the 
work  of  each  employee  each  day. 

5.  It   shows   the  time  spent   on  all   work 
done  each  day. 

6.  It  transfers,  automatically,  the  work  of 
each  employee,  without  regard  to  the  number 
of  symbols  or  account  numbers  affected. 

7.  It    shows    the    work    which    has    been 
started  but  not  completed — work  in  process. 

8.  It  shows  the  work  made  and  cast  but 
not  inspected — work  coming  through. 

9.  It  shows  the  work  made,  cast,  inspected 
and  ready   for   shipment — an  inventory   of 
manufactured  castings  on  hand  in  balance  at 
all  times. 


266  MAXIMUM     PRODUCTION 

10.  It  furnishes  the  means  for  planning 
the  work  to  be  done. 

11.  It  furnishes  the  means   for  planning 
and  making  shipments. 

12.  It  furnishes  the  authority  for  invoic- 
ing shipments  made. 

13.  It     furnishes     the     file     of     castings 
shipped,  by  date  of  shipment. 

14.  It  acts   as  the  means   of  making  up 
the  payroll,  if  this  is  desired. 

15.  It  shows  from  day  to  day  the  produc- 
tion and  cost  of  all  work,  by  castings,  sym- 
bol or  account. 

16.  It  shows  from  day  to  day  the  amount 
of  work  to  be  replaced. 

17.  It  furnishes  facts  as  to  rejections,  with 
reasons  therefor. 

18.  It  makes  every  casting  pass  an  inspec- 
tion. 

19.  It  provides  the  means   of  furnishing 
the  executive  with  weekly  distributions  of  re- 
sults  accomplished. 

20.  It    forms    the    basis    of    making    up 
monthly  costs  according  to  any  classification 
desired — whether    by    pattern;    customers' 
work;  departments;  light,  heavy  and  medi- 
um  work;   by  workmen;   floors;   machines; 
classified  weights,  etc. 


HANDLING    SHOP    DETAILS  267 

21.  It  furnishes  the  basis  for  calculating 
efficiencies  and  the  payment  of  bonus  for 
individual  effort. 

In   conclusion,   the  methods   outlined   en- 
able the  executive  to  obey  the  injunction- 
' '  Know  where  you  are  going,  then  GO/ 


CHAPTER  XIII 

THE   IMPORTANCE   OF   CORRECT   BURDEN 

APPORTIONMENT 

T  T  AVE  you  ever  stopped  to  consider  what 
•*••*•  is  really  involved  in  finding  your  costs 
of  production,  or  appreciated  the  true  sig- 
nificance of  the  word  "  costing  "?  If  you  are 
keeping  costs  as  a  means — cost  reduction  and 
.increased  production  being  the  end  in  view — 
then  you  are  (or  should  be)  getting  results. 
If,  however,  you  look  upon  your  methods  as 
a  "fad"  or  necessary  evil,  using  the  informa- 
tion at  your  disposal  to  no  real  purpose,  you 
are  losing  the  earning  power  of  money  which 
might  be  expended  to  advantage  in  other 
directions,  and  the  only  consistent  advice  is 
either  to  throw  them  out  altogether,  or  begin 
all  over  again  with  the  determination  to  make 
your  methods  count  for  something  as  a  result 
producer. 

We  are  told  that  "art"  is  doing,  while 
"science'  is  knowing;  and  if  this  is  correct, 
we  can  only  conclude  that  costing  as  an  art 
cannot  and  does  not  accomplish  what  is  pos- 

£68 


CORRECT    BURDEN    APPORTIONMENT  269 

sible  if  treated  as  a  science,  which  (to  put  it 
another  way)  is  "organized  knowledge"  and 
as  such  must  and  does  get  down  to  the  prin- 
ciples involved.  The  term  "costing/  con- 
sidered in  the  abstract,  falls  far  short  of 
conveying  the  full  meaning,  and  here  is,  per- 
haps, the  reason  why  so  many  fail  to  appre- 
ciate its  dormant  possibilities.  Let  us  de- 
fine it  as : 

A  science,  which  has  for  its  purpose  the 
giving  to  the  executive  of  an  organized 
knowledge  of  all  pertinent  details,  that  he 
may  be  in  a  position  to  plan  for  maximum 
efficiency.  It  demands,  first  of  all,  a  search 
for  the  underlying  or  basic  principles  which 
affect  the  success  or  failure  of  the  enter- 
prise, in  order  to  get  at  the  wliy  or  reason  of 
things.  Once  established,  they  facilitate  the 
consideration  as  to  how  things  should  be 
done — the  product  or  result  being  propor- 
tionate to  the  excellence  of  the  art  or  doing, 
upon  which  depends  the  application  and 
practical  use  of  this  product  to  specific  ends. 
Every  foundryman  will  agree  with  the  state- 
ment that  a  business  is  conducted  for  profit, 
and  that  while  it  is  one  thing  to  dispose  of 
something,  it  is  quite  another  to  dispose  of 
it  at  a  margin  over  and  above  total  cost, 


270  MAXIMUM     PRODUCTION 

knowing  that  you  have  made  it  and  how 
much.  The  basis  of  the  sale  is  what  is  pro- 
duced, which,  as  far  as  this  chapter  is  con- 
cerned, will  be  castings.  Therefore,  to  find 
the  true  condition  of  affairs,  we  must  deter- 
mine what  the  profits  or  losses  are,  which 
cannot  be  done  until  costs  are  ascertained. 
It  has  long  been  taken  for  granted  that  costs 
could  not  be  determined  until  the  completion 
of  the  work,  but  the  f  oundryman  should  have 
some  means  of  knowing  about  what  the  costs 
are  going  to  be  before  the  work  is  even 
started.  And  they  can  be  known  in  advance 
through  time  studies,  as  well  as  standardiza- 
tion of  operations  and  conditions. 

The  next  consideration  is  the  elements  en- 
tering into  the  cost  of  producing  good  cast- 
ings, which  can  be  divided  into  three  general 
classes : 

1     M-itPrialJDirect  or  Productive— A. 
-iviaieiiaib^        . 

Llndirect  or  non-productive — B. 

rDirect  or  productive — A. 
4 

Llndirect  or  non-productive — B. 
3 — General  Expenses. 

No  argument  is  necessary  to  show  that  if 
the  three  elements  with  their  subdivisions 
could  be  charged  to  the  production  direct, 


CORRECT  BURDEN  APPORTIONMENT      271 

the  determination  of  costs  would  be  a  simple 
matter ;  but  a  glance  at  the  table  just  shown 
will  convince  the  reader  that  direct  charging 
is  possible  in  two  cases  only: 

Direct  material — 1A. 
Direct  labor — 2A. 

and  this  fact  makes  it  necessary  for  the  pro- 
duction to  absorb  the  other  three  items  in 
some  just  and  equitable  manner  to  be  de- 
cided upon,  the  sum  of  these  three  items  be- 
ing, in  the  majority  of  cases,  a  large  one ;  so 
that  upon  the  correctness  with  which  these 
items  are  spread  over  or  apportioned  to  the 
production,  depends  more  than  is  usually 
conceded.  In  our  search  for  principles,  the 
matter  of  handling  these  three  items  prop- 
erly is  of  the  utmost  importance  and  can  be 
really  classed  as  our  basis  or  foundation. 

Direct  or  productive  materials  comprise 
the  various  pig  irons,  scraps,  fluxes,  coke  or 
coal,  the  total  cost  for  any  period  being  a 
direct  charge  against  whatever  is  produced. 

Indirect  or  non-productive  materials  com- 
prise incidental  stores,  supplies,  etc.,  which 
are  used  in  order  to  facilitate  the  manufac- 
ture of  the  product;  the  total  cost  of  which, 
although  a  charge  against  what  is  produced, 


272  MAXIMUM     PRODUCTION 

cannot  be  charged  direct,  but  must  be  appor- 
tioned to  it. 

Direct  or  productive  labor  is  the  money 
paid  to  those  who  actually  produce  or  directly 
assist  in  producing  something  having  a  com- 
mercial value,  which  can  at  all  times  be 
charged  direct  to  specific  production. 

Indirect  or  non-productive  labor  is  the 
money  paid  to  those  who,  while  they  do  not 
actually  produce  or  assist  in  producing  any- 
thing of  value,  are  necessary  in  order  that 
production  may  be  facilitated  and  carried  on 
to  the  best  of  advantage;  this  expenditure 
constitutes  a  charge  to  production  by  ap- 
portionment, owing  to  the  difficulty  in  at- 
tempting to  charge  to  product  direct. 

Expense  is  the  expenditure  entering  into 
the  general  administration  of  the  business, 
the  securing  of  a  finished  product,  as  well  as 
the  marketing  of  this  product  to  the  best  of 
advantage,  which,  on  account  of  its  very  na- 
ture, cannot  be  charged  to  production  direct, 
but  must  be  absorbed  by  it  through  appor- 
tionment. 

In  this  discussion,  the  three  items- 
Indirect  materials 

Indirect  labor 

Expenses 


CORRECT    BURDEN    APPORTIONMENT  273 

will  be  classed  as  "burden" — aptly  styled 
by  one  as  "unseen  dollars";  and  as  was  be- 
fore stated,  the  amount  of  this  burden  is  usu- 
ally a  large  one,  so  that  apportionment  must 
be  as  correct  as  possible,  otherwise  total 
costs  are  bound  to  be  misleading.  We  can  get 
at  this  matter  of  apportionment  more  easily 
by  supposing  that  a  month's  production 
consisted  of  one  casting,  in  which  case  the 
entire  burden  would  be  charged  direct  to  it. 
If  the  production  consisted  of  ten  castings, 
however,  each  weighing  the  same,  with  the 
material  and  labor  costs  the  same  for  each 
of  the  ten  castings,  then  each  would  absorb 
one-tenth  of  the  burden;  and  when  the  cost 
of  the  last  casting  was  ascertained,  it  would 
be  found  that  the  entire  burden  had  been 
absorbed  in  a  just  and  equitable  manner.  If, 
on  the  other  hand,  we  substitute,  as  the  pro- 
duction, one  thousand  castings  of  different 
shapes  and  weights,  with  absolutely  no  rela- 
tion existing  between  the  cost  of  the  direct 
labor  or  direct  material,  how  are  we  going  to 
make  these  castings  absorb  the  expense  item 
so  that  each  casting  or  class  of  castings  will 
be  charged  with  an  equitable  amount ! 

If  one  thousand  tons  of  good  castings  are 
produced  in  a  certain  period  and  the  total 


274:  MAXIMUM     PRODUCTION 

burden  for  the  same  period  is  $10,000,  we 
can  make  the  production  absorb  this  burden 
by  charging  $10  to  each  ton  of  castings  pro- 
duced— this  being  one  method  which  we  will 
term  tonnage  apportionment. 

If,  on  the  other  hand,  one  thousand  tons  of 
castings  are  produced  in  a  certain  period  and 
the  direct-labor  cost  of  producing  these  cast- 
ings is  $5,000,  with  a  burden  against  this 
production  of  $10,000,  we  can  make  this  pro- 
duction absorb  this  burden  by  adding  200  per 
cent  to  the  direct-labor  cost  of  any  casting  or 
class  of  castings,  or  $2  in  expense  for  every 
$1  in  direct  labor — another  method  which  we 
will  term  direct-labor  apportionment. 

It  stands  to  reason  that  both  methods  can- 
not be  right,  although  each  seems  to  have  its 
defenders.  If  one  method  is  correct,  then 
there  is  some  reason,  why  it  is  right  and  the 
other  wrong,  and  this  "why"  must  appeal 
to  you,*  from  a  dollars  and  cents  point  of 
view.  To  present  it  properly,  it  has  been 
deemed  advisable  to  submit  several  cases, 
showing  the  difference  between  the  two  meth- 
ods ;  and  while  at  best  figures  are  dry  and  un- 
interesting, a  quiet  hour,  plus  a  careful  study 
of  the  figures  which  are  to  follow,  will  make 
the  deductions  surprisingly  interesting. 


CORRECT  BURDEN  APPORTIONMENT      275 

We  will  suppose  that  in  a  certain  period  of 
time  your  foundry  produced  2,500,000  pounds 
of  salable  castings,  your  direct  or  productive 
pay  roll  (moulders  and  coremakers)  being 
$15,000;  the  burden  amounting  to  $22,500, 
and  your  rates  for  apportionment,  in  order 
to  make  the  2,500,000  pounds  absorb  the 
$22,500,  being: 

Tonnage  basis — 90  cents  per  100  pounds. 

Direct-labor  basis — 150  per  cent. 

CASE  No.  1 — LIGHT  AND  HEAVY  WOKK. 
Different  Weight — Same  Labor. 

You  make  two  castings,  in  this  period,  one 
being  a  small,  complicated  affair,  weighing 
250  pounds,  which  we  will  call  a  gas-engine 
cylinder;  the  other  being  a  small  flywheel, 
weighing  2,000  pounds,  each  on  account  of  its 
nature  requiring  the  entire  time  of  a  moulder 
for  a  day.  Figuring  material  at  $1  a  hun- 
dred pounds  for  melted  iron  and  labor  at  $3 
per  day  (30  cents  per  hour),  we  have  costs 
as  shown  in  the  table  on  page  276. 

A  study  of  these  figures  will  show  that  in 
the  case  of  the  250-pound  casting,  the  cost  B 
is  $2.25  higher  than  cost  A,  while  in  the  case 
of  the  2,000-pound  casting,  cost  D  is  $13.50 
lower  than  cost  C.  Looking  further,  it  will 


276  MAXIMUM     PRODUCTION 

be  found  that  cost  A  is  $3.10  per  100  pounds, 
while  cost  B  is  $4  per  100  pounds,  the  cost  B 
being  greater  than  cost  A  by  90  cents  per  100 
pounds,  only  a  difference  of  $18  per  ton. 

250  Ib.  2000  Ib. 

'$2.50  .  .Material  ..............  $20.00 

3.00  .  .Labor  (10  hours)  .......      3.00 


cost  .  .  .  $23.00 

2.25  .  .  Burden  (90c.  per  100  Ib.).   18.00 


$7.75  (A)    ..Total  cost  .............  $41.00  (C) 

f$5.50  .  .Prime  cost  ............  $23.00 

4.50  .  .  Burden  @  150  per  cent  .  .      4.50 

Labor  J  -- 

Basis.     ,  $10.00  (B)  .  .  Total  cost  .............  27.50  (D) 

$2.25          .  .  Difference  .............  $13.50 

Cost  A  is  $3.  10  per  100  Ib.  Cost  C  is  $2  .  05      per  100  Ib. 

B"    4.00    "      "     "  "    D"    1.37M    "     "      " 


Difference     .90    "      "     "  Difference    .67H    "      "     " 

Cost  C  figures  out  at  $2.05  per  100  pounds, 
with  cost  D  at  $1.371/o  per  100  pounds,  the 
latter  being  less  than  the  former  by  67l/2 
cents  per  100  pounds,  or  $13.50  per  ton.  As 
the  intention  of  this  chapter  is  to  show  that 
the  tonnage  basis  of  burden  apportionment 
is  incorrect,  this  can  best  be  proven  by  show- 
ing that  direct-labor  apportionment  is  cor- 
rect. In  the  first  place,  we  have  a  small 
casting  weighing  only  250  pounds  and  taking 
the  entire  time  of  a  moulder  for  the  dav, 

*•"    / 

while  a  casting  eight  times  as  heavy  was 
produced  in  the  same  length  of  time,  so  that 
the  productivity  (relative  amount  produced 


CORRECT  BURDEN  APPORTIONMENT      277 

per  man  per  day)  of  the  latter  is  eight  times 
greater  for  the  particular  case  than  that  of 
the  former.  If,  for  the  sake  of  argument, 
we  assume  that  the  tonnage  basis  is  correct, 
giving  the  preceding  statement  the  consid- 
eration it  is. entitled  to,  we  find  that  the  ton- 
nage basis,  as  compared  with  the  labor  basis, 
forces  the  costs  per  100  pounds  to  decrease 
as  productivity  decreases  and  to  increase  as 
productivity  increases.  Does  this  strike  you 
as  being  logical?  On  the  other  hand,  we  find, 
comparing  labor  apportionment  against  ton- 
nage apportionment,  that  the  former  forces 
costs  to  increase  as  productivity  decreases, 
and  to  decrease  as  productivity  increases, 
which  is  as  it  should  be.  Looking  again  at 
case  No.  1,  it  will  be  found  that  in  cost  B,  the 
burden  of  $4.50  is  really  $1.80  per  100  pounds, 
instead  of  a  flat  rate  of  90  cents  per  100 
pounds,  and  in  cost  D,  the  burden  is  22y2 
cents  per  100  pounds,  instead  of  the  90-cent 
rate.  In  this  way  you  are  making  the  light, 
complicated  cylinder  cost  the  most  per  100 
pounds  to  produce  ($4  instead  of  $3.10),  and 
the  heavier  but  easier-to-make  wheel  cost  con- 
siderably less  per  100  pounds  ($1.37%  in- 
stead of  $2. 05)- -which  are  things  that  the 
tonnage  basis  of  apportionment  ignores  alto- 


278  MAXIMUM     PRODUCTION 

gether.  Putting  it  still  another  way,  would 
you  rather  accept  cost  C  as  the  correct  cost, 
add  10  per  cent  as  profit,  and  run  the  risk  of 
losing  the  order  through  what  is  in  reality  an 
overestimation  of  $13.50  per  ton;  or  take 
cost  D  as  your  basis,  add  your  profit,  which, 
with  other  things  being  equal,  would  land 
the  order?  On  the  other  hand,  would  you 
rather  take  $4  per  100  pounds  as  your  cost 
for  the  250-pound  casting,  which  in  making 
cost  you  $1.20  per  100  pounds,  add  your 
profit  and  make  it,  or  use  $3.10  per  100 
pounds  as  the  cost — 90  cents  per  100  pounds 
less — add  your  profit,  and  get  the  work — 
but  lose  money  on  it! 

CASE  No.  2. — HEAVY  WOKK. 
Same  weight — Different  labor. 

In  this  case  I  assume  that  in  your  foundry 
you  have  made  two  castings,  each  weighing 
10,000  pounds,  one  taking  60  hours  to  make, 
while  the  other  was  made  in  20  hours.  As 
the  productivity  of  the  man  who  made  the 
one  piece  in  two  days  is  greater  than  that  of 
the  man  who  made  the  other  piece  in  six 
days,  it  is  logical  to  expect  that  the  piece 
which  took  the  least  time  to  make — where 


CORRECT  BURDEN  APPORTIONMENT      279 

the  productivity  was  greatest — would  cost 
much  less  than  the  piece  taking  the  larger 
amount  of  time  with  a  smaller  productivity. 
Let  us  see,  however,  how  it  works  out, 
placing  the  six-day  and  ten-day  jobs  in  paral- 
lel columns : 


Tonnage 


10,000  Ib.  10,000  Ib. 

$100.00  .  .  Material $100.00 

18.00  (60  hrs.)  .  .Labor 6.00  (20  hrs.) 


-s  $118.00  .  .Prime  cost $106.00 

90.00  . .  Burden  (QOc.per  100  Ib.)     90.00 

$208.00  (A)  Total  cost $196.00  (C) 

$118.00  .  .Prime  cost $106.00 

27.00  ..Burden  @  150  per  cent.       9.00 

Labor 


Basis. 


145.00(B).  .Total  cost 115.00   (D) 


$63.00     .  .  Difference $81.00 

Cost  A  is  $2. 08  per   100  Ib.  Cost  C  is  $1.96  per    100  Ib. 

"     B   "    1  45      "      "      "  "     D  "    1.15     "        "     " 


Difference       .63  Difference      .81 

A  study  of  these  figures  will  show,  in  the 
first  place,  that  cost  B  is  less  than  cost  A  by 
$63,  while  in  the  case  of  the  casting  where 
the  elements  are  greater  productivity  and 
Lower  labor  cost  per  100  pounds,  cost  D  is  $81 
less  than  cost  C,  a  net  decrease  of  $18.  Also 
that  cost  C  is  less  than  cost  A  by  $12,  while 
cost  D  is  less  than  cost  B  by  $30.  Looking 
at  it  still  another  way,  we  find  that  cost  A  is 
$2.08  per  100  pounds,  while  cost  B  is  $1.45 
per  100  pounds,  a  difference  of  63  cents  per 
100  pounds,  or  $12.60  per  ton.  Cost  C  is 


280  MAXIMUM     PRODUCTION 

$1.96  per  100  pounds,  with  cost  D  $1.15  per 
100  pounds,  a  difference  of  81  cents  per  100 
pounds,  or  $16.20  per  ton,  showing  that  the 
decrease  is  greater  in  the  latter  case,  as  it 
should  be.  By  this  method  we  are  making 
the  casting  in  which  the  elements  are  high 
moulding  cost  and  low  productivity,  cost  the 
most;  and,  instead  of  charging  a  flat  rate  of 
90  cents  per  100  pounds,  we  make  cost  D 
bear  9  cents  per  100  pounds,  and  cost  B  27 
cents  per  100  pounds — the  increase  being  a 
logical  one,  as  reflection  will  show,  yet  both 
rates  are  much  less  than  the  90-cent  rate.  It 
should  be  plain  that  if  costs  A  and  C  are  used 
as  a  basis,  they  are  overestimated  to  the  tune 
of  63  cents  and  81  cents  per  100  pounds  re- 
spectively--large  enough  to  make  any  foun- 
dryman  "sit  up  and  take  notice,'  inasmuch 
as  there  cannot  be  an  over  estimation  in  one 
place  without  underestimation  in  another, 
neither  of  which  elements  should  be  allowed 
to  creep  into  any  business.  The  advantages 
of  using  costs  B  and  D  in  bidding  for  heavy 
work,  instead  of  the  prohibitive  figures 
shown  in  costs  A  and  C,  are  no  doubt  appar- 
ent without  any  explanation. 


CORRECT    BURDEN"    APPORTIONMENT  281 

CASE  No.  3 — LIGHT  WORK. 
Same  weight- -Different  labor. 

In  this  case  we  have  two  small  castings, 
each  weighing  150  pounds,  one  taking  7 
hours  to  make,  the  other  3y2  hours — low  pro- 
ductivity in  both  cases,  one  being  even  lower 
than  the  other.  As  direct-labor  apportion- 
ment makes  costs  increase  over  tonnage  ap- 
portionment as  productivity  decreases,  we 
naturally  expect  to  find  that  costs  under  the 
former  will  be  higher  than  under  the  latter, 
which  the  following  figures  will  show  to  be 
the  case: 

150 lb.  150 lb. 

f$1.50  ..Material $1.50 

2.10  (7  hrs.)         ..Labor 1.05(3Mhrs.) 

Tonnage  I  $3  6Q  .  Prime  cost .  .  .  $2 . 55 

1.35  .  .  Burden  (90c.  per  100  lb.)  1 . 35 

I  $4.95  (A)          Total  cost $3.90  (C) 

'$3.60  .  .Prime  cost $2.55 

3.15  .  .Burden  @  150  per  cent.  1.58 

Labor 


Basis. 


6.75  (B)    ..Total  cost 4.13  (D) 


$1 . 80  . .  Difference .23 

Cost  A  is  $3. 30  per   100  lb.  Cost  C  is  $2. 60  per  100  !b. 

"     B  "    4.50       "       "     "  "     D  "    2.80    "      •"    " 


Difference  $1.20  Difference      .20 

From  this  case  it  will  be  seen  that  through 
the  labor  basis  of  apportionment  cost  B  is 
$1.80  greater  than  cost  A,  while  cost  D  is  23 
cents  higher  than  cost  C.  Comparing  A  with 


MAXIMUM     PRODUCTION 

C,  we  find  the  former  greater  by  $1.05,  while 
B  is  $2.62  greater  than  D.  Consideration 
will  show  that  once  more  we  get  our  greatest 
increases  where  they  should  be,  costs  B  and 
D  being  greater  than  A  and  C  by  $24  and  $4 
per  ton  respectively.  In  this  case,  instead 
of  using  a  flat  rate  of  90  cents  per  100 
pounds,  we  have  the  burden  $3.15,  amounting 
to  $2.10  per  100  pounds  and  the  item  of  $1.58 
amounting  to  $1.06  per  100  pounds. 

Comparing  all  of  the  three  cases,  we  find 
that  in  every  case  the  burden  cost  on  the 
tonnage  basis  was  90  cents  per  100  pounds, 
while  on  the  six  castings  of  the  three  cases 
cited,  we  get  rates,  in  cost  per  100  pounds, 
on  the  direct  -labor  basis,  as  follows: 

$1.80      per  100  Ib. 
Per  100  Ib. 


.22^  Per  100  Ib. 

.27   per  100  Ib. 

.09  per  100  Ib. 
2.10  per  100  Ib. 
1.06  per  100  Ib. 


We  find  that  the  lowest  rate  is  9  cents  per 
100  pounds  (cost  D,  case  No.  2).  Here  we 
have  an  hourly  product  of  500  pounds  —  liigli 
productivity,  and  a  labor  rate  of  but  6  cents 
per  100  pounds,  consequently  the  cost  should 
be  low  and  reference  will  show  that  through 
direct-labor  apportionment,  the  cost  was  $115 
instead  of  $196.  Is  not  the  low  rate  of  9 


CORRECT  BURDEN  APPORTIONMENT      283 

cents  instead  of  90  cents  justified,  when  the 
facts  in  the  case  are  considered!  We  also 
find  that  the  highest  rate  is  $2.10  per  100 
pounds  (cost  B,  case  No.  3).  Here  we  have 
an  hourly  product  of  about  21!/2  pounds  in- 
stead of  500  pounds — low  productivity,  and 
a  labor  rate  of  $1.40  per  100  pounds,  instead 
of  6  cents  per  100  pounds;  consequently,  to 
take  care  of  yourself  properly,  you  must  have 
a  higher  cost  than  tonnage  apportionment 
would  give  you,  for  by  means  of  it  you  get 
a  cost  of  $3.30  per  100  pounds,  while  through 
direct-labor  apportionment  your  cost  is  $4.50 
per  100  pounds. 

The  only  logical  conclusion  from  the  fig- 
ures heretofore  shown  is,  first,  that  through 
the  tonnage  method  of  apportionment,  the 
cost  of  heavy  work  is  made  too  high;  and 
second,  that  the  cost  of  light  work  is  made 
too  low.  We  also  get  a  rule  from  direct-labor 
apportionment,  that  burden  costs  are  in- 
versely proportional  to  productivity,  which 
the  tonnage  basis  does  not  recognize.  Now 
then,  as  the  tendency  in  commerce  is  to  lose 
in  bulk  of  sales  as  price  increases,  it  should 
be  evident  to  every  foundryman,  that  making 
the  cost  of  heavy  work  too  high  is  sure  to 
result  in  lost  sales  in  the  case  of  the  jobbing 


284  MAXIMUM     PRODUCTION 

foundry,  or  an  excessive  cost  of  the  foundry 
production  to  the  machine  shop  in  the  case 
of  the  specialty  foundry.  On  the  other  hand, 
by  making  the  cost  of  light  work  too  low,  the 
tendency  is  to  get  plenty  of  light  work  at 
prices  which  are  in  reality  less  than  cost. 
The  result  is  that  both  jobbing  and  specialty 
foundries  are  hurt  alike. 

Getting  back  to  productivity,  we  may  state 
the  fact  that  the  more  a  man  produces  in  a 
given  time,  the  less  should  be  the  cost  of 
what  he  produces,  and  vice  versa.  If,  then, 
the  tonnage  basis  of  apportionment  as 
against  the  labor  basis  does  not  take  this  fact 
into  consideration  (and  the  figures  hereto- 
fore shown  clearly  indicate  that  it  does  not) 
then  the  method  has  absolutely  no  merit  and 
is  consequently  worthless  from  a  commercial 
standpoint.  To  demonstrate  its  inaccuracy 
clearly,  it  was  decided  to  show  the  difference 
between  the  two  methods  graphically. 

Figure  28  shows  amounts  produced  per 
man  per  day,  from  200  pounds  to  2,000 
pounds,  at  different  costs  per  100  pounds, 
line  1  showing  burden  apportioned  to  direct 
labor  and  line  2  showing  burden  apportioned 
to  tonnage.  In  plotting  this  chart,  the  rates 
heretofore  mentioned  were  used,  namely  90 


CORRECT  BURDEN  APPORTIONMENT 


285 


1400  1600  1:00         500011 

The  Engineering  Magazine 


FIG.    28.       BURDEN     COSTS    PER    100    POUNDS    FOR    DIFFERENT 
WEIGHTS    PRODUCED    PER    MAN    PER    DAY. 

cents  per  100  pounds  on  tonnage,  150  per 
cent  on  the  direct  labor,  and  a  daily  labor 
rate  of  $3,  so  in  order  to  arrive  at  our  values 
for  line  1,  we  take  $4.50  as  the  burden,  which 
is  divisible  by  whatever  weight  is  produced 
per  man  per  day.  A  glance  at  the  chart  will 
show  that  there  is  a  vast  difference  between 
costs  of  $18  and  $22.50  per  ton,  on  a  produc- 
tion of  400  pounds  for  a  man  in  a  day,  on  the 
one  hand,  and  $18  and  $4.50  per  ton,  if  the 
same  man  can  produce  2,000  pounds  in  a  day, 
on  the  other. 

A  foundryman  is  likely  to  bring  up  the 


286  MAXIMUM     PRODUCTION 

point,  at  this  time,  that  certain  items  of  ex- 
pense are  proportionate  to  the  increase  or 
decrease  of  the  amount  produced,  which  a 
uniform  basis  of  labor  apportionment  would 
fail  to  consider.  That  such  a  point  would  be 
well  taken  can  be  seen  when  it  is  considered 
that  in  a  large  number  of  cases,  the  more  a 
foundry  is  able  to  produce,  the  greater  would 
be  such  items  as  foundry,  core-room  and  cu- 
pola supplies,  cupola  labor,  repairs  to  flasks, 
yard  labor,  handling  materials,  and  perhaps 
a  few  other  items.  A  compromise,  then, 
which  will  enable  tonnage  to  absorb  a  cer- 
tain proportion  of  the  burden,  and  productive 
labor  the  balance,  is  perfectly  logical — the  re- 
sult of  such  a  combination  method  being 
shown  by  Figure  29,  the  same  expense  items 
being  used  as  in  the  case  of  Figure  28,  with 
the  exception  that  we  assume  that  $4,500  of 
the  $22,500  is  proportionate  to  tonnage,  the 
balance  to  direct  labor,  the  rates  being: 

Line  1- -Compromise  basis- -18  cents  per 
100  pounds  on  tonnage ;  120  per  cent  on  direct 
labor. 

Line  2 — Flat  tonnage  basis — 90  cents  per 
100  pounds. 

To  show  the  comparisons  properly,  line  1, 
Figure  29,  has  been  carried  to  Figure  28  as 


CORRECT  BURDEN  APPORTIONMENT 


287 


5.00 


S.1S 


5.SO 


Line 
and  t 


-  Hurdeo  a  ytortlt 


Line 


t-  Bu 


port! 


led  l 


5.55 


?.0f> 


1.50 

1.95 

1.00 

.'5 

.50 

55 


\ 


1.08 


600 


800 


1000 


1500 


1400 


1600  IsOO         SOOOIb. 

The  Engineering  Magazine 


FIG.    29.       BURDEN    PER    100    POUNDS    FOR    DIFFERENT    WEIGHTS 
PRODUCED    PER    MAN    PER    DAY. 

line  3,  the  following  illustration  serving  to 
show  the  difference  between  burden  appor- 
tionments— one  case  being  a  large  production 
per  man  per  day  and  the  other  a  small  pro- 
duction. Taking  the  case  of  large  production 
per  man  per  day  first,  we  have : 

CASE  No.  4. 

Tonnage  Basis  Labor  Basis.     Tonnage  and  Labor 

2000  Ib.  Casting. 


Material $20 . 00 

Labor  (10  hrs.)  ..      3.00 


Prime  cost  ......  $23  .  00 


R     , 

Burden 


on 
'UU 


90c-  Per  t 
001b.    ) 


$20 . 00 
3.00 

$23.00 

4.50(150%) 


$20.00 
3.00 

$23 . 00 


18c-  Per 


q  fin       c-  Per  5. 
d'bu")  lOOlb.    f 

3.60(120%) 


Total $41.00 

Per  100  Ib.  2.05 


$27.50 


$30.20 
1.51 


288  MAXIMUM     PRODUCTION 

Examining  now  the  figures  with  small  pro- 
duction per  man  per  day,  we  find: 

400  Ib.  Casting. 

Material $4.00  $4.00  $4.00 

Labor  (10  hrs.) .  .      3.00  3.00  3.00 

Prime  cost..        .   $7.00  $7.00  $7.00 

ri      .  ofifJ90c-    Per*  4.50(150%)  72)18c.per   > 

Burden 3'60  }  100  Ib.  -7^  1 100  Ib.     ) 

3.60(120%) 

Total.                 ..$10.60  $11.50  $11.32 

Per  100  Ib 2.65  2.87^  2.83 

After  considering  all  that  has  gone  before, 
Figure  30  will  no  doubt  prove  of  particular 
interest  to  foundrymen,  in  that  it  shows  total 
costs  for  different  weights  produced  per  man 
per  day  by  the  various  methods  of  appor- 
tionment. Moulding  cost  has  been  taken  at 
$3  per  day  of  10  hours,  with  material  at  $1 
per  100  pounds  of  melted  iron,  burden  on 
the  tonnage  basis  being  90  cents  per  100 
pounds,  on  the  direct-labor  basis  150  per 
cent,  and  on  the  tonnage  and  labor  basis,  18 
cents  per  100  pounds  on  tonnage  and  120 
per  cent  on  labor — these  rates  being  the  same 
as  used  in  previous  illustrations.  The  labor 
of  making  cores  is  not  included  in  the  figures, 
as  for  the  purpose  of  illustration  it  was 
deemed  advisable  to  consider  simply  the 
work  of  moulding,  which  would  include  the 
work  of  setting  the  cores,  making  it  an  easy 


CORRECT  BURDEN  APPORTIONMENT 


289 


matter,  in  using  charts  of  this  nature,  to  add 
the  core  labor  to  any  of  the  total  costs. 

The  conclusions  that  can  be  arrived  at 
from  a  study  of  these  charts  are,  first,  that 
the  various  methods  are  correct  at  the  point 


MO         400          600          809         10W        1300       1400         1600        1600       SOOO        3  WO        9400       »«80 

rhefjigin 


FIG.  30.     TOTAL  COSTS    (MATERIAL,  PRODUCTIVE  LABOR,  AND 

BURDEN)    FOR    DIFFERENT    WEIGHTS    PRODUCED 

PER  MAN  PER  DAY. 

ivhere  the  lines  cross;  but  that  to  the  right 
of  the  intersection,  the  burden  and  total 
costs,  per  100  pounds,  on  the  direct-labor  or 
direct-labor  and  tonnage  methods  of  appor- 
tionment, decrease  as  the  amount  per  man 
per  day  increases ;  while  to  the  left  of  the 
intersection,  the  costs  increase  as  the  product 


290  MAXIMUM     PRODUCTION" 

per  man  per  day  decreases,  while  it  will  be 
seen  that  from  Figures  28  and  29  the  burden 
costs  on  the  tonnage  basis  are  the  same,  re- 
gardless of  whether  200  pounds  or  2,000 
pounds  are  produced  per  man  per  day;  this 
explains  the  slight  increase  and  decrease  of 
the  cost  as  shown  by  line  1,  Figure  30.  The 
direct-labor  or  the  compromise  method  con- 
siders that  the  direct  labor  is  in  a  sense  the 
real  investment  on  which  success  or  failure 
depends,  for  the  reason  that,  as  a  rule,  the 
more  producers  there  are  at  work,  the  greater 
will  be  the  production  and  the  lower  the 
costs,  while  costs  increase  and  production 
decreases  as  the  number  of  producers  de- 
crease. Consideration  is  given  to  the  great 
variety  of  work  in  a  foundry,  making  the 
costs  of  both  light  and  heavy  work  about 
what  thev  should  be.  instead  of  too  low  in  one 

ft/  / 

case  and  too  high  in  the  other. 

The  value  of  Figure  30,  to  those  who  de- 
sire to  know  instead  of  guess,  will  be  appar- 
ent after  due  consideration,  and  as  it  is  pos- 
sible to  plot  such  a  chart  from  the  records 
of  any  foundry,  the  rules  given  on  pages  292, 
293,  may  be  found  interesting  as  well  as  help- 
ful in  determining  the  values  for  chart- 
ing. With  figures  from  your  own  records, 


CORRECT  BURDEN  APPORTIONMENT      291 

substituted  for  the  values  shown  in  Figure 
30,  you  will  be  surprised  at  the  margin  of 
difference  between  the  three  methods.  The 
costs  of  good  castings  at  2,200  pounds  per 
man  per  day,  from  Figure  30,  are  shown  as 
$2.04,  $1.48,  and  $1.34  per  100  pounds,  while 
at  200  pounds  the  costs  are  $3.40,  $4.48,  and 
$4.75  per  100  pounds,  while  further  all  three 
lines  cross  at  $2.50  per  100  pounds  for  500 
pounds  per  day  per  man.  What  does  the 
chart  covering  your  own  work  show  you? 
From  Figure  30,  or  from  your  own  chart,  it 
is  evident  that  all  three  methods  cannot  be 
right;  and  as  the  inaccuracy  of  the  tonnage 
method  of  apportionment  has  been  demon- 
strated, it  leaves  only  two  others  to  choose 
from. 

Eliminating  from  our  burden  those 
items  which  are  more  proportionate  to  the 
increase  or  decrease  in  the  production,  we 
have  left  those  items  which  are  proportionate 
to  direct  labor;  so  that  we  have,  by  this 
process,  also  demonstrated  that  direct-labor 
apportionment  is  incorrect,  although  it  would 
be  far  better  to  use  this  method  than  ton- 
nage apportionment — leaving  only  one  meth- 
od, apportionment  to  tonnage  and  direct 
labor. 


292  MAXIMUM    PRODUCTION 

TONNAGE  BASIS. 
Expenses 


Weight  of  Castings  Produced 


=  Eate  per  100  Ib. 


DIRECT-LABOR  BASIS. 
Expenses 


=  Eate  in  Per  Cent. 


Productive  Payroll 

TONNAGE  AND  DIRECT-LABOR  BASIS. 

Expenses  Proportionate 
to  Tonnage 

=  Eate   per   100   Ib. 


Weight  of  Castings  Produced 

Expenses  Proportionate 
to  Direct  Labor 

=  Eate  in  Per  Cent. 

Productive  Payroll 

EULES  EOR  APPORTIONING  BURDEN  AT  THE  EATES 

ABOVE.        t 

W  =  Weight  produced  per  man  per  day. 
M  =  Metal  cost. 

L  =  Amount  paid  to  moulder  per  day. 
Bx  =  Burden  on  tonnage. 
Bo  =  Burden  on  direct  labor. 

B^  =  Burden  on  tonnage  (A)  and  direct  labor  (B). 
Ct  =  Cost  per  100  Ib.  on  tonnage  apportionment. 
('.,=  :  Cost  per  100  Ib.  on  direct-labor  apportionment. 
( '..  =  Cost  per  100  Ib.  on  tonnage  and  direct-labor 
apportionment. 


CORRECT  BURDEN  APPORTIONMENT          293 

EULES  FOR  APPORTIONING  BURDEN  RATES 
TONNAGE  BASIS. 


W 

DIRECT-LABOR  BASIS. 
(WXM)+L  +  (LXB2) 

W 


v^ 


TONNAGE  AND  DIRECT-LABOR  BASIS. 
(W  X  M)+  L  +  (W  X  B3A)  +  (L  X  BSB) 


W 


As  the  purpose  of  this  chapter  was  to 
start  our  foundation  before  commencing  the 
structure,  we  can  with  safety  decide  on  this 
latter  method  as  being  the  basic  element 
about  which  a  system  of  foundry  costing  can 
be  created;  and  with  the  matter  of  burden 
apportionment  disposed  of,  knowing  that  we 
are  right  in  principle,  we  can  take  up  the 
elements  entering  into  burden  construction, 
which  will  be  the  purpose  of  the  chapter  to 
follow. 


CHAPTER  XIV 

ELEMENTS  OF  FOUNDRY  PRODUCTION 

COSTS 

MAINTENANCE  of  price  never  implies 
a  maintenance  of  profit.  Careful 
buying  may  result  in  a  lower  cost  for  direct 
materials,  and  proper  supervision  may  re- 
duce the  cost  per  100  pounds  for  direct  la- 
bor, but  the  best  of  management  cannot  ex- 
pect to  reduce  the  overhead  expenses  or 
"  burden "  in  proportion  to  the  reduction  in 
the  volume  of  production.  As  a  result  we 
find  burden  costs  increasing  as  the  output 
decreases,  this  increase  affecting  profit,  as 
the  following  will  show : 

A  B  C  D 

Monthly  Tonnage 250  200  150  100 

Monthly  burden $5,000      $5,000      $4,000      $4,000 

Direct  material  per  100  Ib $1.00       $1.00       $1.00       $1.00 

Direct  labor  per  100  Ib .75  .75  .75  .75 

Prime  cost.,  $1.75       $1.75       $1.75       $1.75 

Burden  per  100  Ib 1.00         1.25         1.40 

Total  cost  per  100  Ib .,  $2.75       $3.00       $3.15       $3.75 

Selling  price  per  100  Ib 3.00         3.00         3.00 

Profit  per  100  Ib .25          

Loss  per  100  Ib .15 

Per  cent,  of  burden  to  direct  labor 133|         166|         186|        266§ 

29-i 


FOUNDRY    PRODUCTION    COSTS  295 

It  can  be  seen  from  this  table  that  the  item 
of  " burden'  has  considerable  to  do  with  the 
amount  of  profit,  that  there  is  a  certain  point 
in  the  amount  produced  where  income  bal- 
ances cost,  and  that  profits  as  well  as  losses 
begin  from  this  point.  Do  you  know  where 
it  is  in  your  business? 

A  shrewd  manager  recently  stated  that 
his  designer  once  handed  him  the  design  cov- 
ering a  proposed  addition  to  one  of  the  main 
factory  buildings,  with  the  petition  that  he 
approve  it  at  once  so  that  the  work  could  be 
started,  stating  that  the  plan  as  set  forth 
by  the  design  had  been  looked  over  by  sev- 
eral and  approved  by  them.  The  manager 
looked  at  it  for  a  moment  and  laid  it  on 
his  desk  with  the  remark  that  he  would  de- 
cide later  in  the  day  as  to  its  merits.  This 
rather  incensed  the  designer,  who  stated  that 
he  felt  the  manager  qualified  to  reach  a  de- 
cision from  the  facts  as  set  forth  by  the  de- 
sign, and  that  the  desire  to  postpone  the  de- 
cision was  really  a  reflection  on  his  ability 
as  a  designer.  The  manager  replied  by  say- 
ing that  as  far  as  he  could  see,  the  design 
covered  the  ground  in  a  satisfactory  man- 
ner ;  but  that  he  was  less  concerned  with  what 
was  shown  on  the  design  than  he  was  with 


296  MAXIMUM     PRODUCTION 

wliat  had  not  been  shown  at  all,  which  would 
have  to  be  considered  before  an  intelligent 
decision  could  be  reached.  The  manager  told 
me  that  in  going  over  the  design  later  in 
the  day,  he  found  that  it  failed  to  consider 
several  important  points — that  it  did  not 
take  into  consideration  the  future  growth 
and  expansion  of  the  business;  consequently 
the  design  had  to  be  revised,  the  revision 
eventually  saving  the  company  in  question 
considerable  money,  due  to  nothing  but  a 
search  for  points  that  had  not  been  covered. 
What  you  are  doing  is  apparent  and  evi- 
dent; but  it  is  what  you  are  not  doing  that 
should  receive  your  careful  attention.  Ap- 
point yourself  a  court  of  investigation,  issue 
to  yourself  an  order  to  show  cause  wliy  your 
methods  should  not  be  discarded  on  account 
of  their  inability  to  secure  you,  through  their 
use,  maximum  results  at  a  minimum  outlay. 
In  the  preparation  of  your  defense,  you  will 
undoubtedly  be  surprised  at  the  large  amount 
of  information  you  will  gather  as  you  inves- 
tigate the  merits  of  your  methods.  You  may 
start  out  with  the  feeling  that  they  meet  all 
requirements,  but  in  actually  defending  them 
you  will  begin  to  see  that  here,  there,  and 
elsewhere  there  are  weak  places — strings 


FOUNDRY    PRODUCTION    COSTS  297 

which  lead  to  nowhere  in  particular,  points 
not  covered  at  all,  inaccuracies,  and  many 
other  faults  which  render  efficient  operation 
out  of  the  question.  Even  though  you  find 
but  few  serious  faults,  you  will  discover 
enough  to  warrant  the  investigation. 

Success  in  any  branch  of  endeavor  does 
not  just  " happen,'  but  is  rather  the  result 
of  intelligent  oversight  and  supervision.  If 
the  owner  of  a  foundry  business  could  be  the 
moulder,  coremaker,  melter,  business  getter, 
bookkeeper,  and  executive  combined,  all 
would  be  well;  but  as  this  is  impossible,  the 
foundry  executive  must  depend  upon  as  in- 
telligent an  assistance  as  is  possible  to  secure 
-succeeding  or  failing,  according  to  the  ef- 
ficiency of  this  assistance.  Methods,  men, 
clerks,  etc.,  are  simply  "tools,'  which  can 
be  used  to  decided  advantage  or  to  no  real 
purpose,  at  the  will  of  the  executive,  and  it 
should  be  his  duty  to  see  to  it,  first,  that 
these  tools  are  what  they  should  be,  and  sec- 
ond, that  they  are  used  to  advantage.  This 
duty  the  executive  owes  to  himself,  to  his 
business  in  particular,  to  his  industry  in 
general. 

Looking  at  the  matter  from  a  standpoint 
purely  financial,  expenditures  are  of  every 


298  MAXIMUM     PRODUCTION 

conceivable  kind,  and  need  the  most  careful 
watching  in  order  that  the  returns  shall  in- 
clude a  fair  margin  of  profit.  If  you  pur- 
chase a  knife  at  a  hardware  store  for  75 
cents  and  induce  some  one  to  purchase  it 
from  you  for  $1.00,  you  have  made  25  cents 
on  your  investment,  or  33  1-3  per  cent.  If 
you  purchase  pig  and  scrap  irons,  coke,  the 
services  of  moulders,  core  makers,  cleaners, 
laborers,  supervision,  clerical  help,  materials, 
and  supplies,  and  sell  the  resulting  product 
of  this  investment  to  several  people,  you 
must  see  to  it  that  you  charge  each  one 
enough  to  cover  your  investment  and  at  the 
same  time  allow  yourself  a  margin  for 
your  efforts.  If,  after  taking  care  of  this 
investment,  you  are  able  to  deposit  a 
reasonable  amount  to  your  credit,  you  have 
a  right  to  feel  that  you  have  successfully 
conducted  operations.  This  success  is  an  ef- 
fect; something  contributed  to  it,  and  what 
this  something  was  and  why  it  assisted  you, 
is  entitled  to  more  than  passing  attention, 
for  if  you  can  ascertain  the  reasons  and 
properly  classify,  tag  and  file  them  away  for 
future  reference,  you  have  at  your  disposal 
a  means  of  forestalling  disaster.  If,  on  the 
other  hand,  you  had  found,  after  meeting 


FOUNDRY    PRODUCTION    COSTS  299 

your  obligations,  that  you  were  on  the  wrong 
side  of  the  books,  you  would,  without  any 
question,  want  to  know  what  the  causes  were ; 
but  unless  you  had  at  your  command  some 
means  for  assisting  you  in  your  search,  you 
would  be  forced  to  spend  considerable  time 
in  an  endeavor  to  pick  past  performances  to 
pieces  before  locating  your  trouble,  and  the 
chances  are  that  at  best  you  would  get  only 
a  general  idea  of  what  you  desired  to  ascer- 
tain. 

A  man  in  the  act  of  putting  his  hand  in 
his  pocket  for  his  knife  was  asked  why  he 
did  so.  He  replied  by  saying  that  he  did  not 
know,  but  believed  that  his  head  told  his  hand 
to  do  so.  When  asked  why  his  head  suggest- 
ed such  a  procedure,  his  reply  was,  "my 
head  knew  that  the  knife  would  not  come  to 
my  hand,  so  it  sent  my  hand  after  the  knife. ' ' 
Putting  this  same  bit  of  logic  in  another  way, 
we  have — 1 1  details  will  not  come  to  the  execu- 
tive, so  the  executive  must  send  something 
after  the  details.' 

Expenses  (details  in  the  aggregate)  are 
either  conservative  or  beyond  all  reason — 
legitimate  or  illegitimate,  and  the  executive 
must  provide  himself  with  some  method 
which  from  time  to  time  will  acquaint  him 


300  MAXIMUM     PRODUCTION 

with  these  details  properly  classified,  so  as 
to  enable  him  to  keep  his  fingers  on  the  pulse 
of  the  business  and  ascertain  its  condition. 
Chemistry  of  bodies  undertakes  their  resolv- 
ing into  component  parts,  while  "Chemistry 
of  Costs'  undertakes  the  resolving  of  facts 
and  information  into  the  elements  necessary 
for  arriving  at  result-producing  conclusions. 
It  is  evident  to  all,  however,  that  we  cannot 
separate  that  which  has  not  been  grouped, 
hence  the  necessity  for  logically  joining  to- 
gether the  pertinent  details  of  a  business. 
This  joining  or  grouping  we  will  term  "syn- 
thesis/' which  may  be  defined  as: 

The  process  of  automatically  group- 
ing together  the  various  details  of  like 
nature,  which,  when  properly  arranged 
and  classified,  will  show,  at  stated 
periods,  what  has  been  expended  or  ac- 
complished. 

The  resolving  of  results,  which  we  will 
term  "analysis"  may  be  defined  as: 

The  process  of  separating  and  placing 
by  themselves  the  various  details  of  like 
nature,  which  when  contrasted  or  com- 
pared with  the  details  of  the  same  nature 
for  previous  periods,  will  enable  the 


FOUNDRY    PRODUCTION    COSTS  301 

executive,  through  the  instrumentality  of 
thought  and  deduction,  to  determine 
whether  results  are  as  they  should  be  or 
not,  or  to  reach  a  definite  conclusion  re- 
garding a  policy. 

It  has  been  well  said,  "complexity  breeds 
perplexity.'  This  is  especially  so  in  the 
case  of  a  foundryman  who  has  been  the  re- 
cipient of  repeated  reminders,  in  one  form 
or  another,  that  things  are  not  as  they 
should  be.  How  low  can  I  consistently  bid? 
Where  is  my  money  going!  What  can  I  do 
at  different  productions!  What  is  my  real 
efficiency!  These  are  some  of  the  questions 
that  the  foundryman  will  ask  himself,  real- 
izing that  to  turn  a  loss  into  a  profit,  or  to 
increase  his  profits,  he  must  either  increase 
his  prices  or  decrease  his  cost  of  producing 
castings;  but  as  competition  is  such  as  ad- 
mits of  no  increase  in  prices,  his  operation 
is  the  something  upon  which  he  must  concen- 
trate his  attention.  He  finds,  however,  that 
in  the  absence  of  a  well-organized  means  for 
furnishing  pertinent  details  this  information 
can  be  given  to  him  only  in  a  general  way, 
and  that  it  will  be  rather  a  difficult  task  to 
answer  the  self-imposed  questions  to  his  en- 
tire satisfaction.  He  therefore  determines  to 


302  MAXIMUM   PRODUCTION 

find  out  what  he  wants  to  know,  but  is  con- 
fronted with  what  seems  to  him  to  be  a  prob- 
lem more  or  less  complex.  As  a  starting 
point,  however,  he  decides  to  arrange  for  a 
careful  monthly  accounting  of  his  expendi- 
tures, giving  the  various  details  proper  con- 
sideration and  bearing  in  mind  that  there  are 
three  principal  elements  in  production  cost 
-A — Materials,  B — Labor,  C — Expenses — 
he  sets  out,  in  a  receptive  mood,  for  impres- 
sions to  assist  him  in  his  work,  making 
proper  notations  as  he  decides  on  methods 
of  procedure. 

In  the  first  place,  he  notices,  in  going 
through  the  foundry  at  casting  time,  that  he 
has  certain  materials  going  through  a  melt- 
ing process  before  castings  are  produced, 
these  materials  being  the  pig  irons,  pur- 
chased iron  and  steel  scraps,  his  own  or  home 
scrap  (comprising  bad  castings  made  in  the 
shop,  gates,  sprues,  shot  and  over-iron),  and 
the  coke  necessary  to  melt  the  iron.  He 
knows  that  in  the  core  room  they  are  using 
a  coke  inferior  to  that  charged  into  the  cu- 
pola, and  that  to  operate  his  plant  he  is 
forced  to  buy  coal  for  power.  Earlier  in  the 
day,  when  the  moulders  and  core  makers 
were  putting  up  their  work,  the  fact  that 


FOUNDRY    PRODUCTION    COSTS  303 

sand  was  used  by  them  suggested  the  two 
kinds  used — moulding  and  core  sands;  also 
that  a  miscellaneous  lot  of  materials  were 
being  used  by  the  men  throughout  the  plant, 
such  as  chaplets,  hammers,  brooms,  brushes, 
facing,  oils,  iron  and  wire,  bolts  and  nuts, 
etc.,  all  of  which  he  decides  to  call  "stores,' 
before  they  are  delivered  to  the  men  and 
1 '  supplies ' '  when  delivered  to  them.  To  con- 
trol his  item  of  materials  properly,  he  de- 
cides that  it  can  best  be  handled  by  giving 
each  kind  of  material  a  separate  number, 
opening  an  account  with  it  on  his  books, 
charging  it  with  what  is  received  and  credit- 
ing it  with  whatever  is  consumed,  arranging 
at  the  same  time  to  take  care  of  adjustments 
that  may  be  necessary,  the  following  being  an 
exhibit  of  his  material  accounts : 

ACCOUNT  NUMBER.     NAME  OF  ACCOUNT. 

100  to  114  Various  pig  irons  purchased. 

115  Scrap  iron — purchased. 

116  Scrap  steel — purchased. 

117  Home   scrap — Bad  castings   and  re- 

melt. 

118  Core  sand. 

119  Moulding  sand. 

120  Foundry  coke. 

121  Stock  coke. 

122  Coal. 

123  Stores. 

130  Material  adjustments. 


304  MAXIMUM     PRODUCTION 

In  studying  the  conditions  more  closely, 
he  observes  that  there  are  many  things  being 
done  by  his  men,  which,  if  classified  and 
tagged,  would  provide  a  means  for  acquaint- 
ing him  with  the  channels  through  which  his 
money  passes.  He  notices  laborers  digging 
pits,  ramming  up,  and  in  other  ways  assist- 
ing the  moulders;  that  some  of  them  have 
regular  helpers;  that  there  are  apprentices 
at  work;  that  certain  men  are  operating 
moulding  machines,  and  that  a  part  of  this 
work  which  he  calls  ' '  moulding '  is  given  up 
to  cutting  sand,  pouring  off,  and  shaking  out. 
The  moulding  process  naturally  suggests 
core  making  as  a  separate  operation,  while 
the  cleaning  of*  the  castings  suggests  an- 
other, and  as  he  notices  that  considerable 
chipping  is  necessary  before  castings  are  in 
a  condition  for  inspection  and  shipment,  he 
decides  that  it  would  be  well  for  information 
purposes,  to  keep  this  item  separate  from 
the  cleaning  of  castings. 

He  carefully  watches  the  laboring  men 
working  around  the  cupola  in  the  yard, 
around  the  shops,  at  night  getting  out  the 
work,  etc.,  making  notes  as  he  does  so;  he 
sees  that  considerable  is  expended  to  replace 
castings  that  have  not  been  accepted  by  the 


FOUNDRY    PRODUCTION    COSTS  305 

inspector,  which,  according  to  his  way  of 
looking  at  it,  is  information  he  should  have 
in  deciding  as  to  the  efficiency  of  his  men; 
and,  while  he  knows  that  he  expends  quite 
a  little  for  supervision  and  clerical  work,  he 
decides  in  favor  of  keeping  this  item  sepa- 
rate so  as  to  tell,  periodically,  just  what  this 
amounts  to,  without  having  it  looked  up  for 
him.  As  before  stated,  he  has  noticed  that 
quite  an  amount  of  miscellaneous  materials 
is  being  used  by  the  men  around  the  plant, 
and  as  it  is  his  desire  to  place  each  depart- 
ment upon  its  own  footing,  he  concludes  to 
charge  them  with  the  supplies  they  use  in  a 
given  period  of  time,  which  information  he 
can  use  for  purposes  of  comparison  and 
analysis,  in  this  way  perhaps  reducing  the 
consumption  of  the  indirect  or  expense  ma- 
terials. 

He  finds  it  necessary  to  repair  one  of  the 
factory  buildings ;  this  suggests  a  logical  di- 
vision of  the  expenditures  for  maintaining 
his  plant,  instead  of  depending  upon  one 
total  at  the  end  of  the  year,  which  really  tells 
him  nothing  regarding  where  the  money 
went  and  what  required  the  most  or  repeated 
repairing  or  replacing.  As  he  has  several 
departments,  such  as  his  stable,  power  plant, 


306  MAXIMUM     PRODUCTION 

pattern,  machine,  carpenter  and  blacksmith 
shops,  pattern  storage  and  shipping  rooms, 
he  decides  in  favor  of  keeping  separate  the 
expenses  of  operating  them,  so  as  to  enable 
him  to  keep  in  closer  touch  with  the  details 
of  his  business. 

In  watching  his  shop  operations,  he  ob- 
serves that  some  lifting  plates  are  being 
made  in  order  to  facilitate  the  making  of  a 
particular  order;  this  suggests  to  him  an  ac- 
count that  would  tell  him  what  it  costs  to  rig 
up  for  special  or  new  work.  He  decides  to 
charge  this  expense  for  rigging  against  the 
work  necessitating  the  expenditures — as  a 
direct  charge — at  the  same  time  providing 
a  place  in  his  expense  account  for  this  item, 
apportioning  to  his  product  the  difference 
between  the  total  expenses  and  the  rigging 
expense,  the  advantages  of  which  are  that 
while  each  order  is  charged  with  its  proper 
rigging  cost,  the  rigging  expense  is  in  total 
in  a  place  by  itself- -in  this  way  facilitating 
study  and  analysis ;  and  as  it  appears  in  the 
burden  statement  as  a  memorandum  charge 
only,  he  is  in  a  position  to  take  this  expendi- 
ture into  consideration  when  estimating  on 
new  or  special  work. 

The  item  of  salaries  he  divides  into  officers ' 


FOUNDRY    PRODUCTION    COSTS  'JO 7 

and  office  salaries;  travelling  expense  into 
sales  travelling  and  general  travelling ;  dona- 
tions and  dues  perhaps  amount  to  enough 
to  warrant  him  in  keeping  this  item  sepa- 
rate, and  in  this  way  he  goes  through  each 
class  of  expenditure  like  taxes,  insurance, 
depreciation,  legal  expense,  office  expense, 
commissions,  allowances,  etc.,  but  before  fin- 
ishing his  preliminary  work,  he  happens  to 
see  some  credits  to  customers  for  defective 
castings  returned,  and,  while  heretofore  he 
has  credited  his  customers  and  charged  his 
sales — thereby  reducing  his  sales  or  revenue 
account — he  decides  to  open  an  account  which 
he  calls  "defective  castings,'  crediting  his 
customers  the  same  as  before,  but  charging 
his  scrap  account  with  the  scrap  value  of  the 
castings  returned  and  his  defective  castings 
account  with  the  difference  between  the  scrap 
value  and  the  invoice  amount.  He  decides 
this  way  because  first  of  all  he  wants  some 
means  that  will  bring  to  his  attention,  auto- 
matically, the  amount  of  defectives  returned, 
so  that  he  may  concentrate  his  endeavors 
along  the  lines  necessary  to  keep  the  item 
down  to  as  low  a  figure  as  possible,  and  be- 
cause it  is  hardly  fair  to  reduce  the  sales  of 

V 

one  month  bv  work  that  was  credited  to  the 


308  MAXIMUM     PRODUCTION 

sales  account  several  months  before.  If 
the  sales  this  month  are  $50,000,  the  business 
is  entitled  to  this  credit,  despite  the  fact 
that  castings  to  the  invoice  value  of  $2,000, 
invoiced  three  months  ago  when  the  sales 
were  $40,000,  are  returned  this  month.  We 
cannot  reduce  the  sales  of  three  months  ago ; 
the  defectives  returned  have  nothing  what- 
ever to  do  with  this  month's  business,  and 
as  the  $2,000  in  credits  to  the  customers  is  a 
loss,  less  the  scrap  value,  the  logical  plan  is 
to  place  this  item  where  it  will  plainly  show 
as  a  loss.  In  effect  both  methods  are  the 
same  as  regards  "net  income";  for  by  charg- 
ing sales  with  returns,  we  reduce  income  but 
allow  costs  to  remain  as  they  are,  while  by 
charging  cost  with  the  returns,  we  increase 
cost  but  allow  income  to  remain  as  it 
stands,  so  that  the  net  income  would  be  alike 
in  either  case.  It  seems,  however,  that  there 
is  more  justice  in  the  latter  method  with 
the  decided  advantage  of  providing  the 
executive  with  the  best  kind  of  danger  signal. 
After  deciding  on  the  various  items  that 
he  wants  to  keep  track  of,  the  foundryman 
opens  an  account  with  each  one,  giving  each 
an  account  number  to  which  can  be  posted 
the  various  expenditures.  His  first  consid- 


FOUNDRY    PRODUCTION    COSTS  309 

eration,  after  taking  care  of  his  materials, 
as  was  explained  heretofore,  is  to  separate 
his  labor  into  " direct  labor"  and  " expense 
labor " — under  the  first  classification  plac- 
ing: 

MOULDING. — Account  No.  150 — which  is  to  include 
all  time  of: 
Moulders. 
Moulders'  helpers. 
Apprentices. 

Moulding-machine  operators. 
Laborers  digging  pits. 
Laborers  ramming  up. 
Cutting  sand. 
Pouring  off  and  shaking  out. 

CORE  MAKING. — Account  No.  151 — which  is  to  in- 
clude all  time  of: 
Core  makers. 
Core  makers'  helpers. 
Oven  tenders. 
Mixers  and  pasters. 

Under  the  second  classification — expense 
account — he  will  include: 

CUPOLA  LABOR. — Account  No.  152 — to  include  all 
labor : 

Getting  materials  from  yard  to  charging  plat- 
form. 

Weighing  and  placing  charges. 
Taking  bad   castings    and   remelt   to   charging 
platform. 


310  MAXIMUM     PRODUCTION" 

CUPOLA  LABOR. — Account  No.   152    (Continued ) 
Charging  and  tending  cupolas. 
Breaking  stock. 
Cleaning  and  daubing  ladles. 
Cleaning  and  preparing  cupolas  for  each  heat. 

CLEANING. — Account  No.  153 — to  include  all  labor : 
Cleaning  and  grinding  castings. 
Tending  rattlers. 
Pickling  castings. 
Using  sand  blast. 

CHIPPING. — Account  No.  154 — to  include  all  labor 
chipping  and  getting  castings  in  condition  for  in- 
spection and  shipment. 

HANDLING  MATERIALS. — Account  No.  155 — to  in- 
clude labor  unloading,  stacking  and  piling  of: 

Pig  and  scrap  irons. 

Coal  and  coke. 

Sea  coal. 

Fire  clay  and  brick. 

Limestone. 

Core  flour. 

Lumber  and  slab  wood. 

Moulding  and  core  sands. 

Other  materials  not  specified  above. 

YARD. — Account  No.  156 — to  include  labor  loading 
dirt  cars,  cleaning  up  yard,  etc. 

SHOP    SUPERVISION   AND   CLERICAL. — Account   No. 
157 — to  include  salaries  and  wages  of: 
Superintendent. 
Foremen. 
Shop  clerks. 

REPLACE  LABOR. — Account  No.  158 — to  include 
labor  in  foundry  or  core  room  replacing  work 
lost  or  extra  work  done  on  account  of  causes  other 
than  faulty  design  or  construction  of  patterns. 


FOUNDRY    PRODUCTION    COSTS  311 

FOUNDRY  GENERAL. — Account  No.  159 — to  include 
time  of  all  laborers  (when  not  acting  as  moulders' 
helpers)  working  around  foundry  or  core  room: 
Cleaning  up  floors. 
Carrying  iron. 
Shifting  weights. 
Going  after  supplies. 
Carrying  flasks,  patterns  and  cores. 
Time  of— 
Watchman. 
Crane  men. 
Any  incidental   work  not   specified   above. 

NIGHT  GANG. — Account  No.  160 — to  include  all 
time  of  laborers : 

Taking  out  castings. 
Placing  flasks. 

Eemoving  gaggers  and  clamps  from  sand. 
Fixing  sand  and  getting  floors  in  condition  for 
use  by  moulders  when  they  arrive  in  the  morn- 
ing. 

The  third  element — expense — is  divided 
into  Supplies,  Maintenance,  Departmental, 
Miscellaneous  Shop  and  the  Commercial  ex- 
penses, as  follows: 

SUPPLIES. 

FOUNDRY  SUPPLIES. — Account  No.  165 — to  include 
all  supplies  used  by  the  foundry  which  cannot  be 
charged  directly  to  any  one  order  such  as : 

Moulding  sands,  charcoal,  stock  coke,  brushes 
and  brooms,  pails,  bellows,  files,  nails  and 
spikes,  hammers  and  hammer  handles,  torch 
oils,  chaplets.  riddles,  shovels,  iron  and  wire, 


312  MAXIMUM     PRODUCTION 

FOUNDRY  SUPPLIES. — Account  No.  165  (Continued} 
facings,,  parting,  bolts,  nuts,  screws,  buckets, 
torches,    wicking,    cement,    mallets,    sledges, 
wheel  barrows,  waste  and  any  other  incidental 
materials  used  as  supplies  in  the  foundry. 
CORE   EOOM   SUPPLIES. — Account   No.    166 — to    in- 
clude all  supplies  used  by  the  core  room  which 
cannot  be  charged  directly  to  any  one  order,  such 
as: 

Stock  coke,  moulding  sand,  core  sand,  core  oils, 
molasses,  paper,  bolts  and  nuts,  files,  slab 
wood,  wire  and  rods,  core  wash  and  core  com- 
poungls,  flour,  gravel,  brushes  and  brooms, 
nails,  bellows,  wheel  barrows,  wax  tapers  and 
other  miscellaneous  supplies  used  by  the  core 
room. 

CUPOLA  SUPPLIES. — Account  No.  167 — to  include  all 
supplies  not  otherwise  chargeable,  such  as: 

Sand,  slab  wood,  alloys,  gravel,  clay,  limestone, 
wheel  barrows,  shovels,  coke  forks,  coke  bas-» 
kets,  brooms,  tapping  bars  and  any  other  ma- 
terials used  as  supplies  around  the  cupola. 

CLEANING  EOOM  SUPPLIES. — Account  No.   168 — to 
include  supplies,  such  as : 

Brushes,  shovels,  wheel  barrows,  brooms,  chisels, 
hammers  and  hammer  handles,  carbo  blocks, 
etc. 

MAINTENANCE. 

BUILDINGS  AND  REAL  ESTATE. — Account  No.  170- 
to  include  all  labor  spent  and  materials  used  in  re- 
pairing : 

Buildings,  roofs,  fences,  sidewalks,  tracks,  etc. 

PLANT  EQUIPMENT. — Account  No.  171 — to  include 
all  labor  spent  and  materials  used  in  repairing: 
Cupolas,   blowers,    moulding   machines,    cranes, 


FOUNDRY    PRODUCTION    COSTS  313 

grinding,  rattling  and  sand-blast  machinery, 
elevators,  air  equipment,  pattern,  machine, 
carpenter  and  blacksmith-shop  equipments, 
the  stable  equipment,  etc. 

POWER  AND  TRANSMISSION. — Account  No.  172 — to 
include  all  labor  spent  and  materials  used  in  re- 
pairing: 

Boilers,  engines,  compressors,,  dynamos,  lights, 
line  and  counter  shafting,  boxes,  hangers, 
belts,  pulleys,  brackets,  etc. 

CAST  EQUIPMENT. — Account  No.  173 — to  include  all 
labor  spent  and  materials  used  in  making: 

Stars,  clamps,  gaggers,  braces,  bench  and  flask 
weights,  etc. 

PATTERNS. — Account  No.  174 — to  include  all  labor 
spent  and  materials  used  in  repairing  patterns,  also 
replacing  patterns  broken.  This  account  is  to 
cover  work  that  is  not  chargeable  to  customers. 

FLASKS. — Account  No.  175 — to  include  all  labor  and 
material  used  in  repairing  burned,  broken  or  worn 
out  wood  flasks,  wood  flask  bars,  also  broken  iron 
flask  parts. 

DEPARTMENTAL. 

STABLE. — Account  No.  180 — to  include  time  of  team- 
sters and  those  employed  about  stable,  also  feed, 
bedding,  horseshoeing  and  supplies  used. 

PATTERN  SHOP. — Account  No.  181 — to  include  labor 
and  materials  that  cannot  be  charged  direct  to 
some  other  account,  also  pattern-shop  supplies. 

MACHINE  SHOP. — Account  No.  182 — to  include  labor 
and  materials  that  cannot  be  charged  direct  to 
some  other  account,  also  machine-shop  supplies. 

CARPENTER  SHOP. — Account  No.  183 — to  include 
labor  and  materials  that  cannot  be  charged  direct 


314  MAXIMUM     PRODUCTION 

CARPENTER  SHOP. — Account  No.  183   (Continued) 
to   some   other   account,   also  carpenter-shop  sup- 
plies. 

BLACKSMITH  SHOP. — Account  No.  184 — to  include 
labor  and  materials  that  cannot  be  charged  direct 
to  some  other  account,  also  supplies  used  by  the 
blacksmith  shop 

POWER  PLANT. — Account  No.  185 — to  include  time 
of  engineer  and  fireman  and  any  other  labor  used 
in  the  boiler  and  engine  rooms,  also  coal,  oils, 
compound,  waste,  tools,  etc. 

PATTERN  STORAGE. — Account  No.  186 — to  include 
time  of  those  in  charge  of  the  pattern  storage  as 
well  as  any  supplies  used  in  same. 

SHIPPING  EOOM. — Account  No.  187 — to  include 
labor  in  shipping  room,  boxes  or  barrels  (made  or 
purchased)  with  which  to  ship  castings  as  well  as 
any  supplies  used  in  same. 

MISCELLANEOUS   SHOP. 

RIGGING. — Account  No.  190 — to  comprise  the  rig- 
ging or  special  equipment  made  for  some  particu- 
lar customer  or  work  and  to  include  time  of  mould- 
ers, core  makers,  pattern  maker  or  carpenter  or 
any  other  labor  applied  to  this  particular  class  of 
work  and  to  also  include  cost  of  metal  used,  and 
supplies  like  bolts,  nuts,  screws,  rods,  rings,  etc. 

TAXES. — Account  No.  191 — (*). 
INSURANCE. — Account  No.  192 — (*). 
DEPRECIATION. — Account  No.  193 — (*). 

ANALYSIS  EXPENSE. — Account  No.  194 — to  include 
expense  of  operating  chemical  laboratory,  such  as 

*  Self-explanatory. 


FOUNDRY  PRODUCTION   COSTS  315 

salary  of  chemist,  supplies  used,  etc.,  or  the 
amounts  paid  to  outside  chemists  for  metal 
analysis. 

COMMERCIAL — ADMINISTRATIVE. 

OFFICERS''  SALARIES. — Account  No.  200 — salaries  of 
the  executive  officers  of  the  company. 

OFFICE  SALARIES. — Account  No.  201 — salaries  and 
wages  paid  to  heads  of  departments,  clerks  and 
stenographers. 

LEGAL  EXPENSE. — Account  No.  202 — (*). 
INTEREST  AND  DISCOUNT. — Account  No.  203 — (*). 

GENERAL  TRAVELING  EXPENSE. — Account  No.  204 
— all  expense  of  traveling,  having  nothing  to  do 
with  the  selling  of  product. 

TELEPHONE,  TELEGRAMS  AND  POSTAGE. — Account 
No.  205—  (*). 

OFFICE  EXPENSE. — Account  No.  206 — to  include 
such  items  as : 

Pencils,  pens,  stationery,  forms,  rubber  bands, 
pins,  ice,  inks,  brooms  and  dusters,  folders 
and  other  miscellaneous  office  supplies. 

DONATIONS  AND  DUES. — Account  No.  207 — to  in- 
clude such  items  as : 

Subscriptions  to  magazines,  association  dues, 
gifts  for  charitable  and  other  purposes. 

COMMERCIAL — SELLING. 

SALARIES  OF  SALESMEN. — Account  No.  215 — (*). 

SALES  TRAVELING  EXPENSE. — Account  No.  216 — to 
include  expenses  for  traveling  when  expended  for 
the  purpose  of  selling  the  product  of  the  plant. 

COMMISSION. — Account  No.  217—  (*). 
*  Self-explanatory, 


316  MAXIMUM     PRODUCTION 

SALES  FREIGHT. — Account  No.  218 — to  include  pre- 
paid freight  or  express  charges  on  shipments  to 
customers. 

ALLOWANCES. — Account  No.  219 — to  include  credits 
given  to  customers  when  they  do  not  come  under 
the  head  of  credits  for  defective  material  or  in- 
voice corrections. 

DEFECTIVE  CASTINGS. — Account  No.  220 : 

A — to  be  charged  with  castings  returned  from  cus- 
tomers at  invoice  prices,  less  scrap  value. 
B — to  be   charged  with   difference  between  scrap 
and  invoice  values  when  castings  are  kept  by 
customers. 

C — to  be  charged  with  castings  scrapped  after  be- 
ing weighed  and  reported  as  good,  at  cost  value 
less  scrap  value. 

These  various  items  are  in  reality  a  num- 
ber of  " magnets'  which  are  ready  to  draw 
the  various  details  to  them  automatically  in 
such  a  manner  as  to  show  periodically  the 
totals  of  the  various  accounts.  It  would 
hardly  do,  however,  to  list  the  various  totals 
on  an  adding  machine  in  order  to  arrive  at 
the  total  cost,  for  two  reasons: 

1 — Because  analysis  is  facilitated  only 
when  the  item  of  total  cost  is  divided  into 
the  groups  necessary  to  enable  the  executive 
fully  to  grasp  the  real  significance  of  the 
grand  total. 

2 — Because  the  various  items  vary  widely 
in  their  nature.  It  is  therefore  necessary  to 


FOUNDRY   PRODUCTION   COSTS  317 

separate  the  items,  as  shown  above,  into  their 
logical  controlling  elements ;  but  as  the  length 
of  this  chapter  renders  further  elaboration 
out  of  the  question,  the  discussion  of  the  ele- 
ments entering  into  production  costs  will  be 
concluded  in  the  chapter  to  follow,  which 
will  show  how  the  various  items  are  grouped, 
how  and  why  they  are  apportioned  to 
product,  etc. 


CHAPTER  XV 

THE    APPORTIONMENT    OF    FOUNDRY 
COSTS  TO  PRODUCTION 

"VTOTHINGr  is  large  or  small  except  by 
-^^  comparison.  When  a  man  speaks  of 
the  judgment  of  another  as  being  " sound,' 
he  has  compared  this  man's  judgment  or  his 
success  either  with  his  own  or  with  that  of 
other  men  of  his  acquaintance.  When  a  man 
is  called  upon  to  decide  regarding  a  policy, 
he  compares  the  advisability  of  carrying  it 
out  along  certain  lines  with  that  of  carrying 
it  out  along  opposite  lines.  When  a  man 
is  called  upon  to  decide  between  the 
choice  of  two  vocations,  he  studies  the  possi- 
bilities in  one  as  against  those  of  the  other. 
A  lawyer,  in  summing  up,  compares  his  argu- 
ments with  those  of  his  legal  opponent,  while 
the  jury,  in  turn,  compare  the  arguments  ad- 
vanced by  the  opposing  lawyers.  Before  a 
man  becomes  a  member  of  a  church,  he  first 
compares  creeds  and  beliefs ;  before  a  man 
designs  a  machine,  he  compares  the  different 

318 


APPORTIONING  COSTS  TO  PRODUCTION    319 

ways  he  could  construct  it;  before  a  man 
builds  a  house,  he  compares  different  styles 
of  architecture — in  fact,  comparison  seems 
to  be  a  basic  element  of  vastly  greater  im- 
portance than  is  at  first  apparent. 

It  is  no  doubt  evident  to  all  that  nothing 
is  done,  no  move  ever  made,  except  through 
the  instrumentality  of  an  action  of  some  sort, 

•/ 

and  that  no  one  acts  one  way  or  another  with- 
out first  deciding  as  to  the  course  to  pursue- 
conclusion.  Looking  at  comparison,  then,  as 
a  basic  element,  it  can  be  seen  that  after  a 
comparison  has  been  made  but  before  a  con- 
clusion can  be  reached  and  action  taken,  it  is 
necessary  for  something  to  bring  out  the 
good  features  and  eliminate  the  bad  ones- 
to  affirm  or  to  deny — this  something  being  a 
mental  process — reasoning.  Accomplishment, 
then,  is  an  effect — the  result  of  an  efficient 
action,  based  on  a  logical  reasoning  applied 
to  a  thorough  and  complete  knowledge  of 
comparative  elements.  If  this  is  true,  it  fol- 
lows that  if  our  elements  are  incomplete  or 
faulty,  the  reasoning  and  conclusions  are 
bound  to  be  illogical  and  the  action  a  failure 
or  at  least  inefficient. 

All  this  means  a  great  deal  to  the  business 
world,  being  of  special  significance  to  the 


320  MAXIMUM     PRODUCTION 

foundry  industry;  for  in  the  conduct  of  a 
foundry  business,  success  is  dependent  upon 
the  course  pursued  by  its  management- 
action — which  to  result  in  accomplishment 
depends  upon  the  reasoning  applied  to  com- 
parative elements — analysis  in  other  words. 
The  lesson  is  plain.  Study  your  business  in 
a  scientific  manner;  set  up  attainable  stand- 
ards as  to  cost,  expenses,  production;  then 
analyze  the  relation  of  actual  performance  to 
your  standards.  Intelligent  action — accom- 
plishment— success,  will  follow  as  a  natural 
result. 

The  preceding  chapter  gave  a  suggestive 
outline  of  the  comparative  elements  peculiar 
to  the  usual  foundry  enterprise ;  this  chapter 
will  take  these  elements,  which  serve  a  two- 
fold purpose — first,  the  finding  of  costs;  sec- 
ond, the  facilitating  of  analysis — and  re- 
classify  them  so  that  the  exposition  will  not 
only  be  more  comprehensive  and  efficient,  but 
show  correct  apportionment  to  production  as 
well. 

The  conducting  of  a  foundry  business  in- 
volves two  things — the  making  or  production 
of  castings,  and  the  sale  or  disposition  of  the 
castings  produced — the  shop  being  responsi- 
ble for  the  making  or  production,  and  the 


APPORTIONING  COSTS  TO  PRODUCTION    321 

second  element  being  a  purely  commercial 
transaction  with  which  the  shop  has  very 
little  if  anything  to  do,  exercising  no  direct 
influence  over  the  executive  control  and  ad- 
ministration of  the  business;  consequently, 
in  justice  to  both  interests,  we  must  consider 
the  following  as  being  the  principal  divisions 
of  the  grand  total  of  the  elements  entering 
into  cost  of  production : 

l--Shop    Cost — the    cost    of   making    the 
product. 

2 — Commercial  Cost — the  cost  of  adminis- 
tering the  business  and  disposing  of  produc-. 
tion. 

Shop  Cost  is  found  to  be  made  up  of  two 
kinds  of  costs,  which  we  will  term  "Direct 
Cost,"  including  those  items  which  can  be 
charged  direct  to  specific  production,  such  as 
iron,  moulding,  etc.,  and  "Indirect  Cost,' '  in- 
cluding those  items  which  cannot  be  applied 
direct,  such  as  sand,  supplies,  supervision, 
laborers — the  elements  entering  into  Direct 
Cost  being  classed  under  the  headings  or  sub- 
divisions of  "Direct  Materials,"  such  as  pig 
and  scrap  irons,  etc.,  and  "Direct  Labor,' 
such  as  moulding  and  core  making. 

The  elements  which  go  to  make  up  Indirect 
Cost  are  also  of  two  kinds — those  which  have 


322  MAXIMUM     PRODUCTION" 

a  tendency  to  increase  or  decrease  as  the 
volume  of  product  increases  or  decreases, 
and  those  which  do  not  seem  to  have  this  ten- 
dency; consequently,  it  is  necessary  to  ob- 
serve this  distinction  in  our  calculations,  and 
we  will  therefore  divide  "Indirect  Cost"  into 
(1),  Tonnage  Charge,  and  (2),  Foundry 
Charge,  the  first  being  applied  to  product  as 
an  additional  charge  to  the  amount  which  it 
receives  through  Direct  Material,  the  second 
being  applied  to  product  on  the  basis  of 
Direct  (or  Productive)  Labor. 

Commercial  Cost,  defined  above  as  the  cost 
to  administer  the  business  and  dispose  of 
product,  should  be  divided  into  "Administra- 
tive,' including  all  items  of  expense  which 
enter  into  the  successful  management  of  the 
business,  such  as  executive  and  office  salaries, 
office  expense,  supplies,  etc.,  and  "Selling," 
including  all  expenses  made  necessary  be- 
cause of  the  marketing  of  the  product  of  the 
shops,  such  as  salesmen's  salaries  and  ex- 
penses, advertising,  etc. 

From  this  it  will  be  seen  that  we  have  six 
subdivisions  of  costs  common  to  the  majority 
of  foundries: 

DIKECT  MATERIALS, 

DIRECT  LABOR, 


APPORTIONING  COSTS  TO  PRODUCTION    323 

TONNAGE  CHARGE, 
FOUNDRY  CHARGE, 
ADMINISTRATIVE, 
SELLING. 

These  control  the  numberless  details  pecu- 
liar to  them,  the  subdivisions  being  in  turn 
controlled  by  others: 

DIRECT  LABOR          ) 

DIKECT  MATERIAL    }  makm«  DlEECT  CosT' 

FOUNDRY  CHARGE    )       ,  .      T 

m  ^  }-  making  INDIRECT  COST. 

TONNAGE  CHARGE    ) 

ADMINISTRATIVE  )       ,  .      ^  n 

I  making  COMMERCIAL  COST. 

SELLING  ) 

Commercial  Cost,  combined  with  Shop 
Cost  (Direct  and  Indirect  Cost),  make  "To- 
tal Cost";  so  that  no  matter  what  the  execu- 
tive wants  to  scrutinize,  whether  the  amount 
of  sand  or  chaplets  used,  or  the  cost  to  sell 
the  product — the  cost  to  make  the  castings  or 
the  details  regarding  the  shop  expenses — he 
has  a  means  of  getting  at  what  he  wants  to 
know  automatically,  all  being  arranged  and 
classified  for  immediate  reference.  It  is, 
therefore,  necessary  to  reclassify  the  various 
cost  accounts  previously  shown,  according  to 
the  six  subdivisions;  Figures  31,  32  and  33 
show  what  each  subdivision  comprises,  Fig- 


324 


MAXIMUM     PRODUCTION 


ure  34  being  an  exposition  of  how  they  are 
merged  into  Total  Cost  and  apportioned  to 
product. 


DIRECT  MATERIALS 


DIRECT  COST 


Pig  Irons 

Scrap  Iron  or  Steel 

Recovery 

Coke 

Material  Adjustments 


DIRECT  LABOR 


Moulding 


Corcmaking 


The  Engineering  Magazine 


FIG.    31.       THE    ELEMENTS    ENTERING    INTO    DIRECT    COST. 

Begarding  the  suggested  apportionment,  it 
will  be  seen  that  Direct  Material  and  Direct 
Labor,  on  account  of  their  nature,  are  direct 
charges  to  production  and  are  therefore  eas- 
ily disposed  of  in  costing.  In  Indirect  Cost 
we  have  an  element  not  capable  of  being 
handled  so  easily,  for  while  there  is  abso- 
lutely no  question  regarding  the  advisability 


FOUNDRY, 
CHARGE  ( 


G     INDIRECT  COST 


TONNAGE 
CHARGE 


Shop  Supervision  and  Clerical 

^_- -O  Labor 
Cleaning         <^___^ 

~~~O  Supplies 
Chipping 


Foundry  General 

Maintenance 

Power  Plant 

Stable 

Pattern  Shop 

Machine  Shop 

Carpenter  Shop 

Blacksmith  Shop 

Pattern  Storage 

Shipping 

Rigging 

Taxes 

Insurance 

Depreciation-Shop 

Handling  Materials 
Cupola 
Yard  Labor 
Replace  Labor 
(3  Night  Gang 
Supplies 
Power  Plant 
Maintenance 
Analysis  Expense 


Buildings 

Plant  Equipment 

Power  and 
Transmission 

Cast  Equipment 


Labor 
Supplies 


Foundry 
Coreroom 

Patterns 
Flasks 

The  Engineering  Magazine 


FIG.     32.       THE    ELEMENTS     ENTERING    INTO     INDIRECT    COST. 

325 


32G  MAXIMUM     PRODUCTION 

of  apportioning  this  element,  part  to  product 
on  the  basis  of  tonnage  and  part  on  the  basis 
of  direct  labor,  there  may  be  considerable 
question  regarding  the  advisability  of  appor- 
tioning the  various  elements  which  made  up 
this  subdivision  according  to  the  manner  out- 
lined in  Figure  32.  In  determining  to  which 
class  any  item  of  Indirect  Cost  belongs,  the 
relation  of  each  one  to  the  tonnage  produced 
must  be  given  consideration.  If  the  tendency 
is  for  the  cost  of  an  item  to  increase  or  de- 
crease as  the  volume  of  the  product  increases 
or  decreases,  the  item  is  a  charge  to  produc- 
tion on  the  basis  of  tonnage.  If  this  is  not 
the  case,  however,  the  apportionment  must 
be  made  on  the  basis  of  direct  labor. 

Take,  for  instance,  the  item  '  *  Handling  Ma- 
terial. ' '  Here  we  have  an  element  that  will  in- 
crease or  decrease  with  the  tonnage  produced, 
not  proportionately,  perhaps,  but  to  some  ex- 
tent at  any  rate,  while  the  increased  tonnage 
which  necessitated  this  extra  handling  cost 
might  have  been  accompanied  by  the  expendi- 
ture of  about  the  same  amount  of  labor,  ow- 
ing, perhaps,  to  a  different  line  of  work.  This 
reasoning  also  applies  to  Yard  and  Cupola 
Labor.  Eegarding  Eeplace  Labor,  it  is  evident, 
though  it  does  not  always  follow,  that  the 


APPORTIONING  COSTS  TO  PRODUCTION    327 

greater  the  total  of  production  the  greater 
will  be  the  labor  expended  to  replace  castings 
condemned  in  the  foundry;  for  it  is  natural 
to  expect  that  more  castings  will  be  lost  and 
replaced  when  the  production  is  500,000 
pounds  monthly  than  when  it  is  only  200,000. 
From  this  it  seems  proper  to  include  Han- 
dling, Yard,  Cupola  and  Keplace  Labor  in 
the  TONNAGE  CHARGE  section. 

A  foundry  starting  with  a  tonnage  of  10 
tons  daily  will  find  that  it  will  have  to  add 
more  men  to  the  force  who  take  out  the  work 
at  night  when  the  tonnage  increases  to  -20 
tons  per  day,  so  that  it  is  proper  to  class  the 
item  Night  Gang  as  a  tonnage  expense  along 
with  Foundry,  Core  Boom  and  Cupola  Sup- 
plies, which  tend  to  increase  as  production 
increases,  while  to  this  same  class  can  be 
added  Maintenance  of  Flasks  and  Patterns, 
as  these  expenditures  will  be  greater  with  a 
larger  production  than  when  the  production 
is  such  as  does  not  call  into  play  so  many 
flasks  and  patterns.  As  the  power  used  is 
proportionate  to  the  run  of  the  cupola,  the 
proper  amount  of  the  Power  Plant  charge 
should  be  included  in  the  tonnage  item  along 
with  Analysis  Expense,  which  is  included  in 
this  section,  not  so  much  because  the  expense 


32G  MAXIMUM     PRODUCTION 

of  apportioning  this  element,  part  to  product 
on  the  basis  of  tonnage  and  part  on  the  basis 
of  direct  labor,  there  may  be  considerable 
question  regarding  the  advisability  of  appor- 
tioning the  various  elements  which  made  up 
this  subdivision  according  to  the  manner  out- 
lined in  Figure  32.  In  determining  to  which 
class  any  item  of  Indirect  Cost  belongs,  the 
relation  of  each  one  to  the  tonnage  produced 
must  be  given  consideration.  If  the  tendency 
is  for  the  cost  of  an  item  to  increase  or  de- 
crease as  the  volume  of  the  product  increases 
or  decreases,  the  item  is  a  charge  to  produc- 
tion on  the  basis  of  tonnage.  If  this  is  not 
the  case,  however,  the  apportionment  must 
be  made  on  the  basis  of  direct  labor. 

Take,  for  instance,  the  item  "Handling  Ma- 
terial. '  Here  we  have  an  element  that  will  in- 
crease or  decrease  with  the  tonnage  produced, 
not  proportionately,  perhaps,  but  to  some  ex- 
tent at  any  rate,  while  the  increased  tonnage 
which  necessitated  this  extra  handling  cost 
might  have  been  accompanied  by  the  expendi- 
ture of  about  the  same  amount  of  labor,  ow- 
ing, perhaps,  to  a  different  line  of  work.  This 
reasoning  also  applies  to  Yard  and  Cupola 
Labor.  Eegarding  Eeplace  Labor,  it  is  evident, 
though  it  does  not  always  follow,  that  the 


APPORTIONING  COSTS  TO  PRODUCTION    327 

greater  the  total  of  production  the  greater 
will  be  the  labor  expended  to  replace  castings 
condemned  in  the  foundry;  for  it  is  natural 
to  expect  that  more  castings  will  be  lost  and 
replaced  when  the  production  is  500,000 
pounds  monthly  than  when  it  is  only  200,000. 
From  this  it  seems  proper  to  include  Han- 
dling, Yard,  Cupola  and  Eeplace  Labor  in 
the  TONNAGE  CHAKGE  section. 

A  foundry  starting  with  a  tonnage  of  10 
tons  daily  will  find  that  it  will  have  to  add 
more  men  to  the  force  who  take  out  the  work 
at  night  when  the  tonnage  increases  to  -20 
tons  per  day,  so  that  it  is  proper  to  class  the 
item  Night  Gang  as  a  tonnage  expense  along 
with  Foundry,  Core  Eoom  and  Cupola  Sup- 
plies, which  tend  to  increase  as  production 
increases,  while  to  this  same  class  can  be 
added  Maintenance  of  Flasks  and  Patterns, 
as  these  expenditures  will  be  greater  with  a 
larger  production  than  when  the  production 
is  such  as  does  not  call  into  play  so  many 
flasks  and  patterns.  As  the  power  used  is 
proportionate  to  the  run  of  the  cupola,  the 
proper  amount  of  the  Power  Plant  charge 
should  be  included  in  the  tonnage  item  along 
with  Analysis  Expense,  which  is  included  in 
this  section,  not  so  much  because  the  expense 


328  MAXIMUM     PRODUCTION 

is  likely  to  increase  as  the  production  in- 
creases (depending,  of  course,  on  the  variety 
of  the  work),  but  because  of  the  fact  that  an- 
alysis is  directly  related  to  metal  produced. 
Briefly  reviewing,  it  will  be  seen,  upon  con- 
sideration, that  the  items  mentioned  may  in- 
crease in  proportion,  or  faster,  or  not  as  fast, 
as  the  increase  in  production;  but  the  ten- 
dency is  to  increase,  nevertheless,  while  the 
increase  in  the  production  may  be  the  result 
of  about  the  same  amount  of  direct  labor, 
although  this  increase  could  be  accompanied 
by  a  greater  relative  increase  or  even  a  de- 
crease in  this  direct  labor,  all  of  which  seems 
to  indicate  that  apportionment  of  the  items 
mentioned  to  the  production  on  the  basis  of 
tonnage  is  perfectly  logical. 

Let  us  consider  for  a  moment  the  sug- 
gested apportionment  to  "DIEECT  LABOK.' 
If  the  items  have  a  tendency  to  increase  in 
cost  as  the  amount  of  direct  labor  increases ; 
or  if,  on  the  other  hand,  there  is  no  relation 
between  the  two,  and  no  relation  between  the 
cost  of  the  items  and  the  tonnage  produced, 
then  they  are  correctly  shown  in  the  exposi- 
tion. Take,  for  instance,  Shop  Supervision 
and  Clerical.  It  stands  to  reason  that  the 
more  producers  there  are  at  work  the  greater 


APPORTIONING  COSTS  TO  PRODUCTION    329 

will  be  the  need  for  supervision  and  clerical 
work,  while  with  fewer  producers  less  will  be 
required,  although  the  cost  per  dollar  of  di- 
rect labor  will  be  greatest  when  a  minimum 
number  of  producers  are  at  work,  because 
of  the  fact  that  supervision  and  clerical  work 
cannot  decrease  in  proportion  to  the  decrease 
in  the  amount  of  direct  labor  expended ;  they 
decrease  as  the  amount  of  direct  labor  in- 
creases, until  a  point  is  reached  when  more 
supervision  is  required;  and,  as  considera- 
tion will  show  that  the  same  expenditure  of 
direct  labor  might  result  in  a  large  produc- 
tion one  week  and  a  small  one  in  the  week 
following,  it  is  evident  that  the  item  men- 
tioned is  more  nearly  proportionate  to  labor 
expended  than  to  tonnage  produced. 

The  item  of  Labor  and  Supplies  for  the 
Cleaning  Eoom,  as  well  as  Chipping,  has 
been  included  in  the  expense  apportionable 
to  direct  labor,  although  the  labor  of  clean- 
ing and  chipping  can  be  charged  direct  to 
production,  if  the  foundryman  so  chooses. 
It  was  included  as  shown  for  the  following 
reasons.  Consider,  for  instance,  a  small, 
complicated  casting,  which  might  weigh  only 
500  pounds,  taking  the  entire  time  of  a  moul- 
der for  a  day,  as  against  a  large,  plain  cast- 


330  MAXIMUM     PRODUCTION 

ing,  made  in  the  same  time ;  it  is  more  than 
likely  that  the  cleaning  cost  will  be  about  the 
same  in  both  cases,  while  on  the  other  hand 
a  small,  plain,  easy-to-make  casting  could  be 
cleaned  quickly,  while  a  large,  complicated, 
difficult-to-make  casting  would  take  consider- 
able time  for  this  operation.  It  seems,  after 
watching  the  cleaning  operation,  that  it  bears 
a  close  relation  to  direct  labor,  comparing 
the  making  and  cleaning  of  complicated  with 
complicated  work  and  plain  with  plain  work, 
although  it  does  not  follow  from  this  state- 
ment that  the  relation  is  always  proportion- 
ate. On  account  of  this  relation,  however, 
and  because  of  the  fact  that  the  entire  cost 
of  cleaning  and  chipping  could  not  be  ap- 
plied to  product  direct  without  considerable 
detail  work,  necessitating  the  charging  of  a 
part  of  the  cost  to  DIRECT  LABOR  and  the  bal- 
ance to  FOUNDRY  CHARGE,  it  has  been  in- 
cluded as  a  labor  apportionment  item,  not 
only  for  the  sake  of  simplicity,  but  because 
in  this  way  the  executive  is  provided  with  a 
logical  control  of  this  expense.  I  know  of 
an  instance  where  by  keeping  separate  the 
entire  cost  of  the  cleaning,  the  executive  was 
enabled  to  reduce  this  expense,  through  com- 
paring it  with  his  other  elements,  as  well  as 


APPORTIONING  COSTS  TO  PRODUCTION    331 

with  the  same  item  for  previous  periods, 
which  would  not  have  been  possible  had  part 
of  the  cleaning  cost  been  in  expense  and  part 
divided  as  DIRECT  LABOR,  in  small  amounts, 
among  the  various  jobs. 

As  to  Foundry  General,  it  may  be  said  that 

V  %•' 

this  expenditure  is  largely  dependent  upon 
the  number  of  producers  at  work,  regardless 
of  the  tonnage  produced,  although  there 
might  be  times  when  it  would  be  more  nearly 
proportionate  to  tonnage  than  to  labor — as, 
for  instance,  in  cases  where,  because  of 
change  in  work,  about  the  same  amount  of 
labor  might  produce  a  considerably  larger 
tonnage,  necessitating  additional  shop  labor. 
In  most  cases,  however,  the  tendency  is  for 
this  cost  to  increase  or  decrease  with  the  in- 
crease or  decrease  in  direct  labor,  for  which 
reason  it  has  been  classed  as  a  FOUNDRY 
CHARGE  expense.  Regarding  the  mainte- 
nance items,  it  should  be  evident  that  keep- 
ing the  real  estate  and  buildings,  the  equip- 
ment of  the  plant,  etc.,  in  proper  condition 
really  has  nothing  to  do  with  the  amount  of 
the  tonnage  produced  by  the  shops.  Eepairs 
might  be  the  lowest  when  production  was  the 
highest,  or  vice  versa;  in  fact,  deterioration 
might  be  greatest  when  there  was  no  pro- 


332  MAXIMUM     PRODUCTION 

duction  at  all.  As  a  matter  of  fact,  they 
might  not  bear  much  relation  to  the  amount 
of  direct  labor,  but  as  they  are  not  items 
which  increase  or  decrease  with  the  tonnage 
produced,  we  must  include  them  in  the  FOUN- 
DKY  CHAKGE  section,  applying  them  to  produc- 
tion on  the  basis  of  labor.  As  we  arranged 
to  charge  a  certain  proportion  of  the  power- 
plant  cost  to  tonnage,  we  must  include  the 
balance  in  the  FOUNDRY  CHARGE  section  along 
with  the  cost  of  various  departments,  stable, 
pattern  shop,  machine  shop,  carpenter  shop, 
blacksmith  shop,  pattern  storage,  which  must 
be  conducted  regardless  of  whether  the 
amount  of  tonnage  produced  is  5  tons  or  20 
tons  daily,  although  these  costs  would  very 
likely  increase  with  the  increase  in  the  force 
of  producers. 

Upon  first  consideration,  it  might  seem  as 
if  Shipping  belonged  to  the  TONNAGE  CHARGE 
section,  because  of  the  fact  that  the  shipping 
expense  is  sometimes  greater  with  a  large 
amount  of  tonnage  than  with  a  small  amount. 
A  moment's  reflection  will  show,  however, 
that  it  is  possible  for  a  large  amount  of  la- 
bor to  turn  out,  instead  of  large  tonnage,  a 
large  production  in  the  count  of  pieces,  ne- 
cessitating considerable  shipping  expense 


APPORTIONING  COSTS  TO  PRODUCTION  .   333 

for  gathering,  tagging  and  shipping,  so  that 
in  the  strictest  sense  this  term  is  propor- 
tionate to  neither  tonnage  nor  labor,  and  not 
being  a  tonnage  charge,  it  must  be  placed 
in  the  labor  section.  As  regards  Eigging,  it 
follows  that  the  nature  of  the  work  being- 
done,  etc.,  really  governs  this  expenditure, 
and  that  it  might  be  greatest  with  a 
small  tonnage  or  when  the  number  of  pro- 
ducers was  not  large,  or  vice  versa,  so  that, 
like  Shipping,  this  item  really  belongs  in 
neither  section,  for  which  reason  it  has  been 
placed  in  the  labor  section  as  a  memorandum 
charge  only,  in  order  that  Total  Cost  may 
show  the  total  expenditure  for  rigging  for 
comparative  and  estimating  purposes,  while 
the  items  Taxes,  Insurance  and  Deprecia- 
tion, bearing,  as  they  do,  no  relation  to  the 
increase  in  the  tonnage  produced,  are  appor- 
tionable,  because  of  this  fact,  to  DIRECT  LA- 
BOR. 

In  considering  the  handling  of  Commer- 
cial Cost,  all  will  agree  that  some  means 
must  be  provided  for  taking  care  of  it — that 
it  is  not  a  cost  capable  of  direct  charging, 
and  must  therefore  be  classed  with  the  ap- 
portionable  items ;  and  that  in  our  search  for 
a  basis  on  which  apportionment  can  be  made, 


MAXIMUM     PRODUCTION 


(ADMINISTRATIVE 
EXPENSE 


C    ) COMMERCIAL  EXPENSE 


SELLING  EXPENSE 


_^    _  Officers 
salaries 

^~      _  Office 
Legal  Expense 

Interest  and  Discount 
General  Traveling  Expense 
Telegraph  and  Telephone 
Postage 
Office  Expense 
Donations  and  Dues 

Depreciation-Office 
Losses 

Advertising 

Salaries  of  Salesmen 

Sales  Traveling  Expenses 

Commissions 

Sales  Freight 

Sales  Discount 

Defective  Castings 


Allowances 


The  Engineering  Magazine 


FIG.    33.      THE   ELEMENTS    ENTERING    INTO    COMMERCIAL    COST. 

we  can  find  only  two  elements — Production 
and  Sales.  On  the  latter  basis,  the  ratio  be- 
tween the  amount  of  Commercial  Cost  and 
the  amount  of  the  sales  is  ascertained  and 
the  selling  price  of  the  different  orders  mul- 
tiplied by  the  resultant  percentage,  the  prod- 
uct being  added  to  Shop  Cost.  Another 


APPORTIONING  COSTS  TO  PRODUCTION    335 

method  is  to  deduct  monthly,  from  the  reve- 
nue from  sales,  the  Shop  Cost  of  the  sales, 
the  difference  being  gross  profit — the  amount 
of  net  profit  being  ascertained  by  deducting 
the  commercial  expenses  from  the  gross 
profits.  There  is  no  question  that  (as  before 
stated)  the  difference  between  production 
and  commercial  costs  is  of  sufficient  impor- 
tance to  warrant  us  in  strictly  observing  this 
distinction. 

An  analysis  of  the  items  which  go  to  make 
up  the  administrative  and  selling  expenses 
will  show  that  the  expenditures  have  to  do 
with  the  past,  present,  and  future — that  some 
are  concerned  with  sales,  others  with  pro- 
duction or  production  and  sales  combined, 
and  still  others  with  neither  production  nor 
sales.  The  item  "Donations  and  Dues/ '  for 
instance,  has  nothing  to  do  with  production 
or  sales,  the  past  or  the  future.  Some  of 
the  items  in  the  selling  expense  division,  like 
"Advertising  and  Salesmen's  Salaries,'1  are 
concerned  with  getting  future  production- 
others  with  what  was  done  in  the  past,  like 
"Commissions'  and  "Allowances.'  Items 
like  "Telephone  and  Telegrams,'  "Post- 
age' and  "Office  Expenses,'  are  likely  to 
be  as  much  concerned  with  what  is  being 


336  MAXIMUM     PRODUCTION 

produced  as  with  the  work  of  making  sales 
or  taking  care  of  the  sales  that  have  been 
made.  The  past  cannot  absorb  that  which 
belongs  to  the  past ;  we  cannot  hold  the  items 
belonging  to  the  future  until  they  shall  be 
applied;  it  would  be  difficult  to  apportion 
to  sales  those  items  which  belong  to  sales, 
and  to  production  those  which  belong  to  pro- 
duction. It  therefore  seems,  after  briefly  an- 
alyzing the  make-up  of  the  commercial  ex- 
penses, that  it  would  be  best  to  make  each 
month's  production  stand  on  its  own  feet  by 
making  it  absorb  the  entire  expense  for  the 
period,  in  this  way  converting  all  of  the  ex- 
penditures of  a  period  into  an  asset ;  for,  on 
the  assumption  that  we  ship  none  of  the  cast- 
ings we  might  have  made,  at  the  end  of  the 
period  they  would  appear  in  our  resources  as 
"Manufactured  Castings'  at  an  amount 
equal  to  the  cost  of  the  material,  labor,  and 
expenses.  On  a  basis  of  commercial  expense 
apportionment  to  sales,  a  month's  produc- 
tion would  be  charged  to  inventory  at  shop 
cost,  and  assuming  that  there  were  no  sales 
from  which  to  deduct  the  commercial  ex- 
penses, these  expenses  would  have  to  be  con- 
sidered as  a  loss.  A  profit  or  a  loss  should 
show  after  sales  are  made,  not  before,  as  the 


APPORTIONING  COSTS  TO  PRODUCTION   337 

difference  between  the  selling  prices  of  what 
is  sold  and  the  cost  of  product,  which  is  the 
result  when  inventory  is  charged  with  com- 
mercial as  well  as  shop  cost. 

A  good  casting  is  the  result  of  a  moulding 
process  which  involves  the  making  and  set- 
ting of  cores — two  distinct  operations.  A 
completed  engine  is  the  result  of  an  assem- 
bling process  which  involves  the  machining 
of  the  parts — two  distinct  operations. 
Viewed  in  the  light  of  the  illustrations  just 
cited,  production  is  the  result  of  a  manufac- 
turing process  which  involves  a  commercial 
process — the  administration  of  the  business 
and  the  disposition  of  what  is  produced, 
without  which  production  would  be  impossi- 
ble— two  distinct  operations.  Manufacturing 
expenses  bear  a  direct  relation  to  production 
-the  commercial  expenses,  an  indirect;  but 
production,  nevertheless,  is  the  underlying 
element  with  which  any  enterprise  is  con- 
cerned. 

We  can  apportion  "Commercial  Cost"  to 
production  in  three  ways — on  tonnage,  direct 
labor  or  shop  cost.  The  method  to  choose 
should  be  one  which  will  be  fair  to  the  com- 
pany, the  shop  management,  and  the  work- 
men, and  which  will  also  point  out  to  the 


338  MAXIMUM     PRODUCTION 

executive  what  he  should  know  to  supervise 
and  direct  intelligently.  This  can  best  be 
accomplished  by  using  direct  labor  as  our 
basis  for  pro-rating;  but  as  opinions  count 
for  nothing  unless  backed  by  some  sub- 
stantial evidence,  let  us  see  if  there  is  any 
logic  in  this  assertion.  In  the  first  place, 
all  will  agree  that  direct  labor  is  the  true 
investment  in  any  enterprise,  for  the  reason 
that  the  more  we  expend  for  labor  that  actu- 
ally produces  something,  the  greater  should 
be  the  amount  produced,  regardless  of  how 
much  material  was  used  or  the  amount  of  the 
indirect  expenses.  It  is  also  evident  that  the 
greater  the  number  of  producers  at  work  the 
lower  will  be  the  relative  overhead  expenses 
or  "burden,"  while  these  will  increase  as  the 
number  of  producers  decreases,  so  that  the 
relation  of  burden  costs  to  the  amount  ex- 
pended for  direct  labor  is  too  important  to 
be  lost  sight  of- -the  ratio  between  the  two 
being  an  inverse  one.  If  a  workman  pro- 
duces a  large  amount  for  a  low  labor  cost, 
his  production  should  absorb  a  lower  pro- 
portion of  the  burden  cost  than  that  of  one 
who  produces  the  same  amount  at  a  higher 
labor  cost,  or  a  lower  production  at  a  high 
labor  cost.  If  this  is  logical,  then  it  is  right 


APPORTIONING  COSTS  TO  PRODUCTION    339 


DIRECT  Cosrf   D 


SHOP  COST 


INDIRECT  COSTV  ( 
A     \  TOTAL  COST 


E )  DIRECT  MATERIAL 


F  )  DIRECT  LABOR 


H )  FOUNDRY  CHARGE 


I  ) TONNAGE  CHARGE 


COMMERCIAL 
COST 


ADMINISTRATIVE  EXPENSE 


K  )  SELLING  EXPENSE 


APPORTIONMENT 

"E"  to  Product  Direct  "F"  to  Product  Direct. 

"H"  to  Product  on  Basis  of  Direct  Labor  as  a  Percentage. 

"I"  to  Product  on  Basis  of  Weight  of  Castings  (tonnage)  Produced- 

"J"  and  "K"-  Same  as  "H" 


The  Engtner.  ing  Magazine 


FIG.    34.       THE    MAIN    ELEMENTS    OF    PRODUCTION    COSTS    AND 
THEIR    APPORTIONMENT    TO    PRODUCT. 

for  us  to  make  the  product  of  each  workman 
absorb  the  burden  in  proportion  to  the 
amount  paid  him  for  direct  labor.  In  this 
way,  each  man  will  stand  on  his  own  feet, 
for  the  one  having  the  greatest  production 
will  absorb  the  lowest  burden  cost,  and  vice 
versa. 

The  result  to  the  management  is  this- 
work  costing  the  most  in  direct  labor  will 
cost  the  most  in  burden,  which  is  as  it  should 
be  for  furnishing  the  best  means  for  accu- 
rate price  determining,  as  well  as  a  basis 
for  determining  the  efficiency  of  the  shop 


340  MAXIMUM     PRODUCTION 

management  and  the  workmen.  A  customer 
should  pay  the  most  money  for  castings  cost- 
ing in  direct  labor  the  most  to  produce.  If  a 
mistake  has  been  made  in  quoting,  it  will 
show  in  the  form  of  a  much  smaller  profit 
than  anticipated,  or  perhaps  in  a  loss,  or  in 
the  form  of  an  excessive  profit — an  over-esti- 
mation. If  no  mistake  is  made  in  quoting, 
however,  and  the  amount  of  direct  labor 
greatly  exceeds  what  it  should  have  been,  it 
will  not  only  show  in  the  form  of  an  increased 
direct-labor  cost,  but  in  the  increased  amount 
of  burden  absorbed,  with  the  result  that  the 
total  cost  will  be  in  excess  of  the  price  re- 
ceived, showing  a  loss  for  the  executive  to 
take  up  with  the  shop. 

Profits  or  losses  will  be  what  was  made  or 
lost;  prices  will  be  based  on  true  costs;  the 
product  of  a  workman  will  bear  no  more  or 
no  less  of  the  burden  than  its  direct  labor 
makes  it  stand;  fluctuations  will  be  noticed, 
as  burden  costs  will  rise  or  fall  with  the  rise 
or  fall  in  direct  labor,  so  that  after  due  con- 
sideration, I  am  of  the  firm  opinion  that  the 
points  brought  out  logically  point  to  "Com- 
mercial Cost'  apportionment  to  production 
on  the  basis  of  "Direct  Labor, "  as  being 
right  and  proper. 


CHAPTER  XVI 

COST-APPOBTIONMENT     IN     VAEIOUS 
CLASSES  OF   FOUNDRIES 

A  MANUFACTUBER,  whether  making 
^  *•  castings  or  candy,  is  generally  in- 
clined to  the  belief  that  he  can  derive  no  di- 
rect benefit  from  a  discussion  of  proposed 
betterments,  because  of  his  " peculiar'  or 
"complex'  conditions,  which,  according  to 
his  way  of  thinking,  call  for  specific  treat- 
ment— if  any  betterment  is  necessary. 

There  is,  of  course,  no  denying  the  fact 
that  there  are  many  cases  where  Jones  puts 
into  operation  methods  that  are  successful 
in  the  plant  of  Smith,  and  after  a  heart- 
breaking attempt  to  get  things  to  run 
smoothly  under  the  new  arrangement,  finally 
discards  them  for  his  old  methods,  with  the 
result  that  any  other  innovations  thereafter 
are  frowned  upon.  As  a  matter  of  fact,  no 
betterments  can  be  introduced  into  any  busi- 
ness, no  matter  how  correct  they  may  be  in 
principle,  if  little  attention  is  given  to  the 

341 


3  ±2  MAXIMUM     PRODUCTION 

matter  of  their  application  to  the  existing 
conditions;  and  to  this  one  defect  of  inap- 
plicability— a  serious  one,  indeed — can  be 
laid  the  failure  of  many  a  system  that  was 
no  doubt  correct  as  far  as  the  principle  was 
concerned.  An  improvement  involves  a 
change,  although  a  change  does  not  always 
imply  an  improvement;  therefore,  before  a 
manufacturer  plans  any  changes,  he  wants  to 
feel  sure  that  they  are  going  to  better  his  re- 
sults and  still  cover  his  conditions — he  wants 
them  right,  both  in  principle  and  applica- 
tion. 

The  three  preceding  chapters  have  dwelt 
upon  correct  burden  apportionment ;  the  ele- 
ments entering  into  the  burden;  their  appor- 
tionment to  production  and  the  necessity  for 
analysis.  The  suggested  burden  apportion- 
ment took  into  consideration  the  fact  that 
some  of  the  items  were  proportionate  to 
direct  labor,  others  to  the  tonnage  produced ; 
that  it  was  advisable  to  divide  the  burden 
into  the  elements  necessary  to  give  the  execu- 
tive an  intelligent  grasp  of  all  of  the  perti- 
nent details  of  his  business  when  compared 
with  standards ;  and,  although  the  suggested 
division  might  impress  a  manufacturer  as 
being  "too  much  detail,"  the  fact  remains 


COSTS   IX   VARIOUS   CLASSES   OF   FOUNDRIES      343 

that  we  must  know  where  to  concentrate  our 
attention  before  we  can  better  results,  and 
that  compilations  cannot  anticipate  whether 
information  is  going  to  be  valuable  or  abso- 
lutely worthless.  Therefore,  it  would  be  bet- 
ter to  divide  into  three  parts  an  item  which 
could  be  carried  under  one  heading,  if  by  so 
doing  there  is  any  possibility  that  one  of 
these  subdivisions  may  point  out  the  way, 
through  analysis,  to  greater  efficiency — the 
conditions  to  be  covered  largely  governing 
the  kind  and  number  of  accounts.  Finally, 
we  saw  that  analysis  of  "comparative  ele- 
ments" was  an  absolute  necessity,  because 
it  took  into  consideration  the  fact  that  first 
impressions  are  usually  lasting,  whether  cor- 
rect or  incorrect,  and  that  it  is  an  unwise 
policy  to  jump  at  conclusions  unless  we  can 
see  the  conclusions. 

Granting  the  importance  of  analysis — the 
correctness  of  a  burden  apportionment  part 
to  labor  and  part  to  tonnage — and  the  neces- 
sity for  a  detailed  division  of  what  is  ex- 
pended, the  next  feature  a  foundryman  is 
concerned  with  is  the  consideration  as  to  hoic 
his  costs  are  to  be  absorbed  by  his  produc- 
tion. In  order  to  treat  this  phase  of  the  sub- 
ject as  intelligently  as  possible,  it  is  neces- 


344  MAXIMUM     PRODUCTION 

sary  to  divide  the  foundry  industry  into  dif- 
ferent classes,  as  follows: 

1 — Jobbing  Foundries — Foundries  selling 
all  their  production  to  outside  concerns. 

2 — Specialty  Foundries — Foundries  sell- 
ing all  their  production  to  the  business  of 
which  they  are  a  part. 

3 — Specialty  Foundries  Doing  a  Jobbing 
Business — Foundries  selling  part  of  their 
production  to  outside  manufacturing  enter- 
prises and  the  balance  to  the  business  of 
which  they  are  a  part. 

There  seems  to  be  little  uniformity  in 
foundries  in  the  above  classes  when  the  mat- 
ter of  the  division  of  the  production  is  con- 
sidered. Some  foundrymen  want  it  divided 
one  way,  while  others  have  some  other 
method  of  ascertaining  the  cost  of  different 
kinds  of  production;  in  fact,  a  half-dozen 
foundries  in  the  same  locality  may  have  as 
many  different  ways  of  figuring.  The  fol- 
lowing are  the  principal  divisions  of  the  sev- 
eral ways  possible  for  a  f oundryman  to  treat 
his  production,  applicable  to  the  three  classes 
of  foundries  specified  above : 

(a)  Cases  where  a  f  oundryman  is  satisfied 
with  simply  the  iveight  and  cost  of  his  pro- 
duction in  total. 


COSTS   IN   VARIOUS   CLASSES   OF    FOUNDRIES      345 

(b)  Cases  where  the  production  is  classi- 
fied according  to  ivelglit  and  is  divided  into — 

Total  weight  and  cost  of  "light'    work. 
Total  weight  and  cost  of  "heavy'    work. 

(c)  Cases  were  the  production  is  classified 
according  to  the  principal  methods  of  mould- 
ing, being  divided  into — 

Total  weight  and  cost  of  loam  work. 
Total  weight  and  cost  of  dry-sand  work. 
Total  weight  and  cost  of  green-sand  work. 

(d)  Cases  where  the  production  is  classi- 
fied according  to  the  use  of  the  castings  pro- 
duced, being  divided  as  follows   (if  we  as- 
sume, for  example,  a  concern  manufacturing 
engines  and  boilers) — 

Total  weight  and  cost  of  engine  castings. 

Total  weight  and  cost  of  boiler  castings. 
Or,  if  the  output  consists  of  a  varying  line, 
such  as  the  manufacture  of  steam  and  gas 
engines,  boilers,  and  a  special  line  of  work 
such  as  laundry  machinery,  we  can  divide — 

Total    weight   and   cost    of    steam-engine 
castings. 

Total  weight  and  cost  of  gas-engine  cast- 
ings. 

Total  weight  and  cost  of  boiler  castings. 

Total  weight  and  cost  of  laundry-machin- 
ery castings. 


346  MAXIMUM     PRODUCTION 

Or  we  can  still  further  classify  by  taking  the 
production  of  the  steam-engine  castings  ac- 
cording to- 
Total  weight  and  cost  of  beds. 

Total  weight  and  cost  of  frames. 

Total  weight  and  cost  of  wheels. 

Total  weight  and  cost  of  cylinders. 

Total  weight  and  cost  of  all  other  steam- 
engine  castings. 

(e)  Cases  where  the  production  is  classi- 
fied according  to  the  way  the  castings  are 
made,  being  divided  into- 

Total  weight  and  cost  of  machine-made 
castings. 

Total  weight  and  cost  of  hand-made  cast- 
ings. 

(/)  Cases  where  the  production  is  classi- 
fied according  to  the  weight  and  cost  of  each 
separate  casting. 

(g)  Cases  where  the  production  is  classi- 
fied according  to  the  total  weight  and  cost  of 
each  customer's  work. 

(h)  Cases  were  the  production  is  classi- 
fied according  to  departments  in  which  they 
are  made,  as  for  example — 

Total  weight  and  cost  of  bench-work  cast- 
ings. 

Total  weight  and  cost  of  side-floor  work. 


COSTS   IN    VARIOUS   CLASSES   OF   FOUNDRIES      347 

Total  weight  and  cost  of  main-floor  work. 

(i)  Cases  where  the  production  is  classi- 
fied according  to  the  various  classes  of 
weights,  as  for  instance  all  castings  weigh- 
ing from  200-400  pounds  being  treated  as  in 
a  class  by  themselves. 

(j)  Cases  where  the  production  is  classi- 
fied according  to  the  disposition,  being  di- 
vided into — 

Total  weight  and  cost  of  castings  made 
for  our  own  consumption. 

Total  weight  and  cost  of  castings  made  for 
sale  to  the  trade. 

If  space  permitted,  various  combinations 
of  the  cases  shown  could  be  cited,  as  for  in- 
stance, j  and  b  could  be  combined,  the  cast- 
ings made  for  sale  and  consumption  being 
in  turn  divided  into  the  weight  and  cost  of 
the  light  and  heavy  work.  Care  should  be 
exercised  before  deciding  on  what  case  or 
combination  of  cases  to  use,  as  conditions 
(and  conditions  only)  must  govern  the  plan 
to  follow. 

The  following  rules  have  been  worked  out 
in  order  that  the  calculations  entering  into 
the  apportionment  of  costs  to  production 
may  be  more  clearly  understood,  our  known 
elem'ents  being- 


348  MAXIMUM     PRODUCTION 

1_  -Weight  of  castings  produced. 
2 — Total  cost  of  Direct  Material. 
3 — Total  cost  of  Direct  Labor. 
4 — Total  cost  of  Foundry  Charge. 
5 — Total  cost  of  Tonnage  Charge. 
6 — Total  cost  of  Commercial  Cost. 

EULES  FOR  RATE  DETERMINATION 

1. — To  find  the  rate  per  1,000  pounds  of  Direct 
Material,  divide  the  cost  in  total  of  Direct 
Material  by  the  tonnage  produced. 

2. — To  find  the  rate  in  per  cent  of  Foundry  Charge, 
divide  the  cost  in  total  of  Foundry  Charge 
by  the  cost  in  total  of  Direct  Labor. 

3. — To  find  the  rate  per  1,000  pounds  of  Tonnage 
Charge,  divide  the  cost  in  total  of  Tonnage 
Charge  by  the  tonnage  produced. 

4. — To  find  rate  in  per  cent  of  Commercial  Cost, 
divide  the  cost  in  total  of  Commercial  Cost 
by  the  cost  in  total  of  Direct  Labor. 

5  __To  find  the  rate  per  1,000  pounds  of  Total  Cost, 
divide  the  total  cost  by  the  tonnage  produced. 

APPORTIONMENTS. 

6. — To  ascertain  the  cost  of  Direct  Material,  multi- 
ply the  tonnage  produced  by  the  rate  from 
Eule  1. 

7. — To  ascertain  the  cost  of  Direct  Labor,  charge 
the  proper  amount  direct. . 

8. — To  ascertain  the  Foundry  Charge,  multiply  the 
Direct  Labor  by  the  rate  from  Rule  2. 

9. — To  ascertain  the  Tonnage  Charge,  multiply  the 

tonnage  produced  by  the  rate  from  Rule  3. 
10. — To  ascertain  the  Commercial  Cost,  multiply  the 
Direct  Labor  by  the  rate  from  Rule  4. 


COSTS   IX   VARIOUS   CLASSES   OF   FOUNDRIES      349 

After  the  rates  have  been  determined,  the 
following  rules  can  be  used  for  enabling  the 
foundryman  to  cost  correctly  any  classified 
production: 

EULES  FOR  THE  TREATMENT  OF  THE  VARIOUS  CASES. 

11. — Select  from  list  prevously  shown — cases  a-j, — 
the  division  desired. 

12. — Classify  the  production  according  to  the  di- 
vision selected. 

13. — Ascertain  the  Direct  Material  cost  by  using 
Eule  6  for  each  classification. 

14. — Post  to  each  classification  the  correct  amount 
of  Direct  Labor. 

15. — Apportion  Foundry  Charge  by  using  Eule  8. 

16. — Apportion  Tonnage  Charge  by  using  Eule  9. 

17. — Apportion  Commercial  Cost  by  using  Eule  10. 

18. — Add  13-17  inclusive. 

19. — For  rate  per  1,000  pounds  of  Total  Cost,  use 
Eule  5. 

Eules  15-19  inclusive  apply  to  each  classification 
separately. 

ILLUSTRATION. 

Values.  Apportionment. 

Tonnage— 3,050  Ib.  Tonnage— 3,050  Ib. 

Direct   Material— $10.00  Direct  Material..  .$30.50 

per  1,000  Ib.  Direct  Labor 20.00 

Direct  Labor— $20.00.  Foundry   Charge..  25.00 

Foundry    Charge  —  125  Tonnage   Charge..     7.63 

per  cent. 
Tonnage    Charge — $2.50      SHOP  COST   $83.13 

per  1,000  Ib.  Commercial  Cost.  7.00 
Commercial  Cost  —  35 

percent.  TOTAL    COST $90.13 

Per  1,000  Ib 29.55 


350  MAXIMUM     PRODUCTION 

Through  the  use  of  the  above  rules,  a  f oun- 
dryman  is  in  a  position  to  determine  the 
costs  of  his  production,  in  total  as  in  Case  a, 
as  one  extreme  (hardly  to  be  recommended, 
however),  or  by  each  individual  casting,  as 
in  Case  f,  as  the  other  extreme.  He  would 
have,  in  any  case  other  than  Case  a,  a  classi- 
fied cost  of  his  production,  the  amount  of 
detail  work  necessary  to  secure  the  costs 
depending  upon  the  selection  from  the  list 
of  cases ;  and,  as  outlined,  the  costing  would 
take  into  consideration  the  fact  that  the  pro- 
duction, though  classified,  was  the  output  of 
a  single  department. 

If,  however,  the  foundryman  found  it  nec- 
essary, because  of  his  conditions,  to  obtain 
all  the  information  possible  to  secure,  it 
would  then  be  necessary  to  divide  the  foun- 
dry into  certain  departments.  Take,  for  in- 
stance, a  foundry  where  a  number  of  ma- 
chines are  in  use;  where  a  considerable 
amount  of  bench  work  is  done,  but  where 
the  bulk  of  the  work  is  light  and  heavy  floor 
work.  It  would  then  be  well  to  divide  the 
foundry  into  Machine,  Bench  and  Floor  de- 
partments, and  each  in  turn  could  have  its 
production  classified  according  to  one  or 
more  of  the  cases  previously  shown.  To 


COSTS   IX   VARIOUS   CLASSES   OF   FOUNDRIES      351 

treat  the  foundry  as  made  up  of  these  three 
departments,  it  would  be  necessary  to  make 
a  number  of  separations  in  the  figures.  The 
cost  of  Direct  Material  and  Labor  would  be 
separated  into  the  costs  for  the  three  de- 
partments, by  divisions  decided  upon,  while 
the  other  three  items — Foundry  Charge, 
Tonnage  Charge,  and  the  Commercial  Cost, 
would  have  to  be  separated  as  far  as  possible 
into — First,  the  costs,  which  could  be  charged 
direct  to  the  three  departments,  and  second, 
the  costs  of  a  general  nature  which  would 
have  to  be  apportioned  to  the  production  of 
each  department. 

A  brief  analysis  of  the  costs  accounts, 
which  appeared  in  Chapter  XIV,  will  show 
that  there  are  several  elements  which  could 
be  charged  direct  to  the  departments ;  others 
could  be  charged  part  to  the  departments  and 
part  to  the  "general'  section,  while  still 
others  would  have  to  be  included  in  the  "gen- 
eral' section.  Each  individual  case  would, 
of  course,  determine  the  divisions,  but  in  a 
general  way  the  apportionment  shown  on 
pages  352,  353  would  be  representative  of 
the  items  which  would  appear  as  direct, 
direct-general,  and  general  charges. 

After  the  costing  has  been  done  along  the 


353  MAXIMUM     PRODUCTION" 

lines  suggested,  it  will  be  found  that  the 
departments  are  charged  with  the  proper 
amount  of  Direct  Material,  Direct  Labor,  and 
a  portion  of  the  Foundry  Charge,  Tonnage 
Charge,  and  Commercial  Cost,  and  in  order 
that  the  production  of  the  departments  may 
absorb  all  the*  expenses,  it  will  be  necessary 
to  distribute  the  remaining  portion  of  the 
three  latter  elements  in  the  "general'  sec- 
tion, in  such  a  manner  as  shall  give  to  each 
department  an  equitable  amount.  To  do  this 
Direct  Labor  can  be  used  as  the  basis  for 
distributing  the  Foundry  Charge  and  Com- 
mercial Cost  items,  while  the  Tonnage 
Charge  items  are  distributed  on  the  basis  of 
tonnage  produced.  This  seems  to  be  fair,  as 
the  department  having  the  largest  amount  of 
Direct  Labor  and  tonnage  would  have  to 
stand  the  largest  amount  of  these  expenses 
apportionable  to  labor  and  tonnage,  which 
could  not  be  charged  direct. 

REPRESENTATIVE  DISTRIBUTION  OF  COSTS 

FOUNDRY  CHARGE. 

Direct  to  departments — 

Power  Plant,   Shipping,  Rigging,  Taxes  and  In- 
surance. 


COSTS  IN  VARIOUS  CLASSES  OF  FOUNDRIES   353 

Part  direct  to  departments  and  the  balance  to  "gen- 
eral"— 

Cleaning  Labor,  Chipping,  Shop  Supervision  and 
Clerical,  Foundry,  General  and  Cleaning  Room 
Supplies. 

General — 

Maintenance  of  Buildings,  Plant  Equipment, 
Power  and  Transmission  Machinery  and  Cast 
Equipment;  Stable,  Pattern  Shop,  Machine 
Shop,  Carpenter  Shop,  Blacksmith  Shop,  Pat- 
tern Storage  and  Depreciation. 

TONNAGE  CHARGE. 

Direct  to  departments — 

Replace  Labor,  Night  Gang,  Foundry  Supplies, 
Core  Room  Supplies  on  the  basis  of  the  Core 
Labor  in  each  department,  and  Maintenance  of 
Patterns. 

Part  direct  to  departments,  balance  to  "general" 

Maintenance  of  Flasks. 
General — 

Cupola  Labor,  Handling  Materials,  Yard  Labor, 
Cupola  Supplies,  Power  Plant,  Analysis  Expense. 

COMMERCIAL  COST. 

All  of  the  Administrative  to  "general." 
All  of  the  Selling  direct  to  the  departments  where 
possible  and  the  balance  to  "general." 

The  following  rules  can  be  used  for  dis- 
tributing to  the  departments  the  Foundry 
Charge,  Tonnage  Charge,  and  the  Commer- 
cial Cost  items  in  the  "general'7  section: 


354  MAXIMUM     PRODUCTION 


« 


RULES  FOR  DEPARTMENTAL  DISTRIBUTION 

1. — For  Foundry  Charge  and  Commercial  Cost — 
A — Direct  Labor  in  the  Machine  Department. 
B-  "  "  "  "  Bench  Department. 

C-        "  "       "     "    Floor  Department. 

D— Total  Direct  Labor  (A  +  B  +  C). 
ABC 

—  =  Departmental  rates  in  per  cent. 
D     D     D 

Distribute  to  each  department,  using  the  rates  as- 
certained, the  proper  proportion  of  the  Foundry 
Charge  and  Commercial  Cost,  treating  each  ex- 
pense element  separately. 

2. — For  Tonnage  Charge — 

E — Tonnage  in  Machine  Department. 

F—  "    Bench  Department. 

G-         "         "    Floor  Department. 

H— Total  tonnage  produced  (E  +  F  +  G). 

E     F     G 

—  nr  Departmental  rates  in  per  cent. 
H    H    H 

Distribute  to  each  department,  using  the  rates 
ascertained,  the  proper  proportion  of  the  Ton- 
nage Charge,  treating  each  expense  element  sepa- 
rately. 

•> 

3. — For  each  department,  add  the  amounts  charged 
direct  and  distributed,  according  to  the  follow- 
ing classes — Direct  Material,  Direct  Labor, 
Foundry  Charge,  Tonnage  Charge  and  Commer- 
cial Cost. 

We  are  now  in  possession  of  three  sets  of 
figures  covering  the  three  departments,  and 
to  get  at  the  detailed  costs  of  the  product  of 
each  of  them,  use  the  rules  11-19  inclusive,  by 


COSTS   IN   VARIOUS   CLASSES   OF   FOUNDRIES      355 

simply  adding  the  words  "for  each  depart- 
ment "  as,  for  example:  (Eule  11) — "Se- 
lect from  the  list  previously  shown — cases  a-j 
-the  division  desired,  for  each  department,' 
and  after  the  rates  per  1,000  pounds  have 
been  ascertained  for  each  classification  of 
the  production  in  each  of  the  three  depart- 
ments, the  foundryman  will  be  in  possession 
of  what  he  wants  to  know  regarding  his  costs 
to  produce. 

Each  foundrvman  must  determine  for  him- 

*/ 

self,  from  his  conditions,  whether  he  wants 
to  treat  his  foundry  as  a  single  department 
or  to  divide  it  into  several.  If  the  principal 
requirement  is  almost  absolute  accuracy, 
regardless  of  the  detail  necessary,  and  the 
proposition  is  a  large  one,  then  there  is  no 
question  but  that  the  accounting  should  con- 
sider the  foundry  as  made  up  of  several  de- 
partments. If,  however,  the  foundry  execu- 
tive does  not  want  to  go  into  the  detail  that 
is  necessary  to  departmentalize  his  foundry, 
and  if  costs  are  wanted  that  are  fair  and 
within  reason,  the  foundryman  can  then  con- 
sider his  foundry  as  one  department  with  a 
classified  output,  which  will  give  the  results 
he  wants  at  a  minimum  expenditure. 
While  not  within  the  province  of  this  dis- 


356  MAXIMUM     PRODUCTION 

cussion  to  lay  down  hard  and  fast  rules  as  to 
specific  treatment,  the  following  is  offered 
for  foundries  considered  as  a  single  depart- 
ment, as  a  means  of  covering  the  ordinary 
conditions  that  are  met  with  in  the  three 
classes  of  foundries  previously  mentioned : 

1. — Foundries  under  Class  1,  classify  production  ac- 
cording to  Case  g  (customers'  work)  with  pro- 
vision to  treat  certain  work  according  to  Case  / 
(individual  castings). 

2. — Foundries  under  Class  2,  classify  according  to 
Case  d  (use). 

3. — Foundries  under  Class  3,  classify  production  as 
shown  at  1. — for  jobbing  work,  and  at  2. — for 
work  for  consumption  by  the  business  of 
which  the  foundry  is  a  part. 

Through  the  methods  above  suggested,  we 
get  at  the  end  of  a  period,  for  Class  1  foun- 
dries, the  cost  of  production  by  customers, 
which  cost  is  offset  by  the  price  at  which 
the  work  is  sold  to  the  trade,  the  difference 
establishing  the  desirability  of  the  work  in 
question  as  well  as  the  places  where  atten- 
tion must  be  concentrated ;  and  as  provision 
can  easily  be  made  for  ascertaining  the  cost 
of  certain  castings  for  certain  customers,  the 
foundryman  has  in  his  possession,  through 
the  classification  suggested,  the  information 
necessary  to  improve  where  necessary,  the 


COSTS  IN  VARIOUS  CLASSES  OF  FOUNDRIES   357 

conditions  determining  how  he  shall  improve. 
We  also  get  at  the  end  of  a  period,  for  Class 
B  foundries,  the  cost  of  the  castings  for  the 
machine  or  boiler  shop,  according  to  the 
use,  which  cost  is  offset  by  the  price  allowed 
the  foundry  and  charged  to  the  departments 
using  the  castings. 

Few  appreciate  the  fact  that  consumption 
of  castings  should  be  at  rates  which  recog- 
nize the  difference  in  the  cost  to  produce 
them,  so  that  it  seems  important  that  our 
costing  take  this  difference  into  considera- 
tion. A  clothier,  because  he  purchases  100 
suits  at  $15  each,  100  suits  at  $20,  100  suits 
at  $25,  and  100  suits  at  $30,  will  not  sell  them 
at  $27  each  simply  because  $27  means  the 
average  cost  of  $22.50  plus  20  per  cent  profit. 
Assuming,  however,  that  he  did  this,  on  his 
$15  suits  he  would  make  $1,200 ;  on  the  $20 
suits  he  would  make  $700 ;  on  the  $25  suits  he 
would  make  $200,  while  on  the  $30  suits  he 
would  lose  $300,  and  as  a  result  he  would 
have  $1,800  profit  in  all.  The  chances  are 
that  he  would  have  a  hard  time  disposing  of 
$15  and  $20  suits  at  $27;  while  because  of 
the  quality,  his  customers  would  jump  at  the 
chance  of  buying  $25  and  $30  suits  at  $27. 
At  any  rate,  on  his  two  most  expensive  lines 


358  MAXIMUM     PRODUCTION 

he  would  make  $200  and  lose  $300,  and  he 
would  perhaps  have  to  trust  to  good  fortune 
and  "sales"  to  dispose  of  the  others;  so 
that  by  the  time  he  had  sold  them  all,  he 
would  very  likely  find  that  he  was  a  long 
way  from  making  his  20  per  cent.  Instead 
of  this,  our  clothier  would  take  each  cost 
and  add  his  profit,  and  if  a  man  wanted  a 
cheap  suit,  he  would  pay  a  price  that  would 
net  a  profit  of  20  per  cent,  which  would  also 
be  the  case  should  a  man  want  a  more  ex- 
pensive garment,  and  when  the  suits  were 
all  disposed  of,  the  clothier  would  find  that 
he  had  made  a  profit  of  $1,800  on  his  invest- 
ment. 

This  illustration  applies  to  machinery 
manufacturers  making  their  own  castings. 
An  average  cost,  because  of  the  word  "aver- 
age," means  that  some  cost  more  and  others 
less,  and  there  seems  to  be  no  consistent 
reason  why  the  difference  should  not  be  ob- 
served. Assume  that  in  a  machine  shop  two 
lines  are  being  manufactured — one  a  steam 
engine  of  simple  construction,  and  the  other 
a  gas  engine  of  intricate  and  complicated 
design ;  it  will  be  found  that  the  castings  for 
the  first  line  will  cost  considerably  less  than 
the  castings  for  the  gas  engines.  If  the 


COSTS   IN   VARIOUS   CLASSES   OF   FOUNDRIES      359 

steam-engine  castings  cost  $2.25  per  100 
pounds  and  the  gas-engine  castings  $2.75, 
why  use  an  average  of  $2.50  for  all?  A  dif- 
ference of  $5.00  per  ton  either  way  is  some- 
thing to  think  about  when  the  total  weight 
of  the  castings  in  the  engines  is  taken  into 
consideration,  for  on  the  steam-engine  cast- 
ings it  would  mean  a  reduced  cost  of  the 
finished  engine,  which  would  result  either  in 
a  greater  profit,  if  the  regular  price  is  ob- 
tainable, or  the  same  profit  on  a  larger  num- 
ber of  sales,  due  to  a  decreased  price;  and 
while  the  cost  of  the  finished  gas  engines 
would  be  greater,  necessitating  a  higher 
price,  it  is  reasonable  to  ask  the  consumer 
to  pay  the  most  for  that  which  cost  the  most 
to  produce,  especially  when  it  is  a  compli- 
cated proposition  of  superior  design  and 
workmanship,  enabling  the  manufacturer  to 
talk  quality. 

I  wish  to  emphasize,  at  this  point,  the  im- 
portance of  treating  all  foundries  as  jobbing 
foundries.  If  a  machine  shop  is  purchasing 
its  castings  from  an  outside  foundry  for 
$2.70  per  100  pounds,  this  figure  is  naturally 
used  by  the  machine  shop  in  figuring  the  cost 
of  the  cast  iron  in  the  machine.  Should  a 
foundry  be  built  and  operated,  the  person 


360  MAXIMUM     PRODUCTION 

who  is  placed  in  charge  of  the  foundry  may, 
through  efficient  management,  turn  out  a 
production  costing  $2.45  per  100  pounds. 
These  same  castings,  purchased  outside,  cost 
$2.70;  therefore  the  castings  that  are  made 
are  worth  this  same  amount  to  the  company, 
the  foundry  being  entitled  to  a  credit  of  $0.25 
per  100  pounds  as  the  difference  between 
what  these  castings  are  worth  and  what  they 
actually  cost  to  make.  Suppose,  for  instance, 
a  certain  machine  selling  for  $2,000  contains 
20,000  pounds  of  cast  iron,  which  at  $2.70 
per  100  pounds  would  mean  $540  as  the  cost 
of  this  material.  Would  it  be  good  business, 
if  the  machine  had  a  ready  sale,  to  reduce 
the  price  by  $50  simply  because  the  castings 
are  being  made  for  $5.00  a  ton  less?  Or 
would  it  be  better  to  treat  this  saving  as  a 
profit — which,  in  reality  it  is — and  as  such 
having  nothing  whatever  to  do  with  the  mat- 
ter of  price?  The  latter  method  seems  the 
most  logical,  and  if  any  cut  in  price  is  neces- 
sary it  should  be  at  the  expense  of  the  de- 
partment getting  the  credit  for  the  sale. 

In  estimating,  market  conditions  largely 
prevail;  and  there  seems  to  be  no  good 
reason  why  a  price  of  $2.45  should  be  used 
instead  of  $2.70,  if  this  latter  quotation  is 


COSTS   IN   VARIOUS   CLASSES   OF   FOUNDRIES      361 

near  the  market  figure.  A  sales  manager 
recently  stated  that  whenever  he  bid  on  a  job 
which  contained  considerable  cast  iron,  he 
was  generally  able  to  get  the  work — in  fact 
the  orders  seemed  to  fall  into  his  lap.  This 
led  him  to  investigate,  and  he  found  that  his 
competitors  were  using  a  greater  rate  for 
cast  iron  than  he  was.  Looking  still  further, 
he  learned  that  he  was  using  the  actual  foun- 
dry cost  figures — which  was  not  a  complete 
cost  by  any  means — instead  of  the  rate  that 
he  would  have  been  forced  to  use  had  his 
company  been  purchasing  the  castings,  with 
the  result  that  he  had,  unknowingly,  been 
"doing'  his  company  out  of  profits  which 
would  have  been  made  had  the  rate  been 
higher.  At  any  rate,  the  cost  figures  were 
increased  without  any  apparent  reduction  in 
sales. 

On  the  other  hand,  suppose  on  account  of 
a  low  tonnage  or  other  reasons  the  castings 
should  cost  $2.90  instead  of  $2.70.  Would  it 
do  to  charge  the  machine  shop  with  castings 
at  $2.90 — an  increase  in  the  cost  of  $4.00  per 
ton — or  make  the  foundry  stand  this  loss  by 
charging  the  machine  shop  with  castings  at 
$2.70,  in  this  way  costing  up  the  work  at  a 
price  for  which  the  castings  could  be  pur- 


362  MAXIMUM     PRODUCTION 

chased  outside?  It  would  certainly  not  do 
to  take  the  $2.90  price  into  consideration  for 
estimating  purposes,  because  of  the  fact  that 
the  competition  might  be  using  a  price 
around  the  $2.70  mark — the  difference 
amounting  to  quite  a  little  on  an  order  of 
any  size.  At  any  rate  there  is  no  getting 
away  from  the  fact  that  a  loss  has  been  made, 
for  if  castings  which  cost  $2.90  to  make  can 
be  purchased  for  $2.70 — and  only  good  ones 
at  that — then  $4.00  per  ton  is  being  thrown 
away;  and  as  the  machine  shop  is  in  no  way 
to  blame  for  this  loss,  we  should  make  the 
department  producing  these  castings  stand 
whatever  the  loss  might  amount  to.  If  the 
foundry  is  to  take  care  of  its  own  losses,  then 
the  foundry  is  entitled  to  any  profits  it  might 
make. 

The  foundry  should  therefore  be  consid- 
ered as  a  producing  department,  in  the  same 
sense  that  the  machine  shop  is  a  producing 
department,  instead  of  treating  it  as  an  ad- 
junct of  the  machine  shop.  It  should  be  car- 
ried as  a  separate  department  through  the 
general  books  of  the  company,  in  this  way 
placing  the  foundry  squarely  on  its  own  feet 
-side  by  side  with  the  machine  shop,  a  posi- 
tion it  is  most  certainly  entitled  to — besides 


COSTS   IX  VARIOUS   CLASSES  OF   FOUNDRIES       363 

furnishing  the  proper  incentive  to  each  and 
every  man,  from  the  foundry  superintendent 
down  to  the  apprentices,  for  the  reason  that 
they  feel  that  if  all  do  their  share  in  making 
a  success  they  can  participate  in  that  suc- 
cess through  increases  in  pay.  In  addition, 
such  a  procedure  gives  to  the  management  a 
means  for  determining  the  efficiency  of  its 
foundry  department,  as  well  as  deciding 
them  as  to  whether  it  would  be  policy  to 
close  their  foundry  and  purchase  their  cast- 
ings elsewhere.  It  also  places  the  foundry 
on  about  the  same  basis  as  outside  foundries, 
which  not  only  tends  to  make  estimation 
more  uniform,  but  competition  more  intelli- 
gent. 

To  carry  the  foundry  properly  through 
the  books  of  a  manufacturing  company,  I 
would  suggest  that  two  accounts  be  opened 
as  General  Ledger  accounts  —  Foundry 
Manufacturing  Account,  and  Foundry  In- 
come Account,  and  as  a  large  number  of  con- 
cerns are  beginning  to  treat  all  materials  as 
"stores'  until  used,  the  plan  should  be  to 
sell  monthly  to  " stores/'  as  "castings,'  the 
total  output  of  the  foundry  at  a  price  that 
will  correspond  as  closely  as  possible  with 
the  price  that  would  have  to  be  paid  for  pur- 


364:  MAXIMUM     PRODUCTION 

chased  castings.  To  illustrate:  assume  that 
the  foundry  produced  300  tons  in  a  month  at 
a  cost  of  $48.00  per  ton,  or  $14,400,  the  divi- 
sions being — materials,  $6,000;  labor,  $3,900, 
and  expenses,  $4,500 — the  price  allowed  the 
foundry  being  $2.65  per  100  pounds,  or 
$53.00  per  ton.  Our  Journal  entries  would 
read:* 

Charges.  Credits. 

(1)  Foundry  Mfg.  Acct. 300  tons  produced@$48.00  ton.  .$14,400 

Stores  Acct $6,000 

Labor  Acct 3,900 

Burden 4,500 

(2)  Stores 300  tons  purchased@$53.00  ton ...  15,900 

(3)  Foundry  Mfg.  Acct .  .  300  tons  sold  to  Stores 15,900 

(4)  Foundry  Mfg.  Acct .  .  Profit,  month's  production 1,500 

(5)  Foundry  Income  Acct — Monthly  profit  300  tons 1,500 

LEDGER  ACCOUNTS. 

Stores. 

(2)  300  tons  castings  pur- 
chased from  fdry.  @ 
$53.00  per  ton $15,900 

Foundry  Mfg.  Acct. 

(1)  300  tons  produced  @  (3)  300  tons  sold  to  stores, 

$48.00  per  ton $14,400  $53.00  per  ton $15,900 

(4)  Monthly  profit 1,500 

$15,900 
$15,900 
Foundry  Income  Acct. 

(5)  Monthly  profit  300  tons,  $1,500 

Before  concluding,  it  might  be  well  to  state 
that  in  determining  the  cost  of  production  in 
foundries  in  Class  2  and  3,  consideration 
should  be  given  to  the  fact  that  there  are  no 
selling  expenses  to  be  added  to  the  produc- 

*  Figures  show  Journal  entries  and  corresponding 
postings. 


COSTS   IN   VARIOUS   CLASSES  OF   FOUNDRIES       365 

tion  made  for  use  for  the  business  of  which 
the  foundry  is  a  part,  because  of  the  fact  that 
this  expense  is  necessary  in  marketing  the 
finished  product  of  the  machine  or  boiler 
shop,  for  which  reason  it  would  be  a  charge 
against  the  production  of  these  departments 
and  not  against  that  of  the  foundry — the 
business  really  buying,  as  before  stated,  the 
entire  monthly  production  of  the  foundry, 
this  transaction  being  one  in  effect  only,  in- 
volving the  expenditure  of  no  money  what- 
ever as  a  selling  expense.  Defective  castings 
returned  from  the  machine  or  boiler  shop 
because  of  defective  workmanship  in  the 
foundry — the  only  selling  expense  element 
the  specialty  foundry  has  to  deal  with- 
would  be  treated  as  "foundry  errors'  and 
included  in  the  Foundry  Charge  section,  at 
the  price  less  scrap  value.  Foundries  in 
these  same  classes,  in  the  absence  of  an  or- 
ganization of  their  own,  should  be  made  to 
stand  a  portion  of  the  general  administrative 
expenditure — a  combination  of  judgment  and 
an  analysis  of  the  items  making  up  this  ele- 
ment, to  determine  the  proper  proportion  to 
charge  to  the  Foundry  Department. 

THE    END. 


THE  TWELVE  PRINCIPLES  OF 
EFFICIENCY 

BY  HARRINGTON  EMERSON 

HARRINGTON    EMERSON'S    earlier    book     ("Effi- 
ciency as  a  Basis   for  Operation   and  Wages"), 
while    thoroughly    practical,    is    essentially    the 
statement  of  a  philosophy — a  new  view  of  the  total  in- 
dustrial problem  and   the  relations  and  proportions   of 
the  factors  that  enter  into  it. 

This  later  volume,  stronger  even  than  the  former,  and 
more  specific  in  statement,  is  a  reduction  of  the  doctrine 
of  efficiency  to  practice.  Emerson  discovers  twelve  prin- 
ciples by  which  efficiency  is  determined.  Five  of  these 
concern  the  relations  between  men — between  employer 
and  employee;  seven  of  them  concern  industrial  meth- 
ods, or  institutions  and  systems  established  in  the  works. 
These  twelve  principles  are  so  definite,  so  constant,  so 
true,  that  they  may  be  used  as  gauges.  Any  industry, 
any  establishment,  any  operation,  may  be  tested  by 
these  twelve  principles,  and  its  inefficiency  located  and 
measured  by  the  amount  of  its  failure  to  conform  to 
one  or  more  of  them. 

CONTENTS  BY  CHAPTERS 

I.     The   Organization   Which   Makes    Efficiency   Pos- 
sible. 
II.     How  Efficiency  Organization  Differs  from  the  Old 

Type. 

III.     First  Principle:   Clearly  Defined   Ideals. 
IV.     Second  Principle:    Common-Sense. 
V.     Third   Principle:    Competent  Counsel. 
VI.     Fourth  Principle:   Discipline. 
VII.     Fifth  Principle:   The  Fair  Deal. 
VIII.     Sixth    Principle:    Reliable,    Immediate    and    Ade- 
quate Records. 

IX.     Seventh  Principle:   Despatching. 
X.     Eighth  Principle-:    Standards  and   Schedules. 
XL     Ninth  Principle:   Standardized  Conditions. 
XII.     Tenth  Principle:   Standardized  Operations. 
XIII.    Eleventh    Principle:     Written    Standard-Practice 

Instructions. 

XIV.     Twelfth  Principle:   Efficiency  Reward. 
XV.    The  Measurement  and  Cure  of  Wastes. 
XVI.     The  Executive  of  an  Efficient  Organization. 

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PRODUCTION   FACTORS 

IN   COST-ACCOUNTING   AND   WORKS 
MANAGEMENT 

BY  A.  HAMILTON  CHURCH 


IN  this  book  the  author  extends,  in  a  remarkable  and 
most  interesting  way,  the  study  of  "The  Proper  Dis- 
tribution of  Expense  Burden."  He  follows  the  clear 
and  instructive  manner  which  appealed  to  accountants 
in  his  former  and  now  well-known  work,  but  he  extends 
the  principles  to  new  grounds  and  larger  possibilities. 
He  proposes,  indeed,  not  a  new  way  of  accounting,  but 
a  new  way  of  looking  at  the  whole  problem  of  manu- 
facturing. He  purposes  to  avoid  the  present  methods  of 
averaging  and  distributing  expense  by  a  percentage,  and 
instead  of  this  to  separate  from  the  outset  all  the  im- 
portant factors  of  production  (as,  for  example,  buildings, 
power,  stores  and  transport,  etc.),  and  reduce  them  to 
unit  charges. 

The  demonstration  is  concrete  enough  to  enable  the 
cost  accountant  to  apply  it  to  his  own  case,  and  yet  not 
lacking  in  the  broad  statement  of  principle  that  adapts 
it  to  all  cases.  The  scope  of  the  argument  is  outlined  by 
the  chapter  titles  which  follow. 

CONTENTS    BY    CHAPTERS 

I.    The  Definition  of  Factors  Other  Than  Labor. 
II.     Production  Factors  as  Related  to  Cost  Accounts 
and  Staff. 

III.  Elements  of  the  Land  Factor. 

IV.  Buildings,    Lighting,    Heating    and    Ventilation, 

Stores  and  Transport,  and  Organization. 
V.     Apportioning    Indirect    Expense    by    Production 

Factors. 

VI.     Control  Accounts. 
VII.     Costs  in  Relation  to  the  Financial  Books. 

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EFFICIENCY  AS  A  BASIS  FOR  OPERA- 
TION AND  WAGES 

BY  HARRINGTON  EMERSON 

MR.  EMERSON'S  book  is  not  merely  the  develop- 
ment of  a  theory  of  works  management.  It 
is  the  statement  of  principles  applied  and  re- 
sults secured  in  practice.  The  methods  advocated  are 
being  used  in  some  of  the  largest  manufacturing  and 
operating  institutions  in  the  United  States.  They  have 
proved  their  worth  and  practicality  by  resultant  sav- 
ings amounting  in  the  aggregate  to  millions  of  dollars 
annually,  as  proved  by  the  balance  sheets  of  corpora- 
tions making  official  report  of  their  earnings  and  ex- 
penses. This  volume  contains  the  fullest,  and  indeed 
the  first  complete,  statement  made  of  the  elements  of 
organization,  management,  and  operation  under  the  Effi- 
ciency or  Individual-Effort  system. 

The  author  has  achieved  national  distinction  by  his 
widely-noticed  work  in  reorganizing  the  Santa  Fe  shops 
and  his  connection  in  a  similar  capacity  with  the  Amer- 
ican Locomotive  Co.  His  methods  for  increasing  in- 
dustrial efficiency  have  been  attentively  examined  by  in- 
terested managers  and  specialists  East  and  West. 

CONTENTS  BY  CHAPTERS 

I.     Typical  Inefficiencies  and  Their  Significance. 
II.     National   Efficiencies :    Their  Tendencies   and   In- 
fluence. 

III.  The    Strength    and    Weakness    of    Existing    Sys- 

tems of  Organization. 

IV.  Line   and   Staff   Organization   in    Industrial    Con- 

cerns. 
V.     Standards:    Their  Relations  to  Organization  and 

to  Results. 

VI.     The   Realization   of   Standards    in   Practice. 
VII.     The  Modern  Theory  of  Cost  Accounting. 
VIII.     The  Location  and  Elimination  of  Wastes. 
IX.     The  Efficiency  System  in  Operation. 
X.     Standard    Times    and    Bonus. 
XL     What  the  Efficiency   System  may  Accomplish. 
XII.     The  Gospel  of  Efficiency. 

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WORK,  WAGES,  AND  PEOFITS 

BY  H.  L.  GANTT 

THIS  book  is  a  complete  explanation  of  Mr.  Gantt's 
practice  in  reducing  production  costs.  He  shows 
the  reasons  on  which  his  system  is  based,  de- 
tails the  methods  he  uses,  and  exhibits  the  results  ob- 
tained in  a  large  number  of  cases.  In  this  last  connec- 
tion many  colored  charts  are  presented,  showing  graph- 
ically the  working  of  the  bonus  system  in  various  fac- 
tories. These  alone  would  make  the  book  invaluable 
for  study  and  reference. 

Mr.  Gantt  takes  up  the  ordinary  wage  systems,  show- 
ing logically  and  clearly  why  day-work  and  piece-work 
fail  to  promote  efficiency.  Then  he  proceeds  to  discuss 
"Task-Work  with  a  Bonus,"  and  defines  clearly  the  four 
elements  involved  in  it — Expert  Investigation,  Stand- 
ard Methods,  Proper  Instructions,  Sufficient  Compensa- 
tion. He  describes  each  step  necessary  in  introducing 
the  plan,  and  everything  essential  to  success  in  its  intro- 
duction. 

Mr.  Gantt  himself  is  too  well  known  to  need  intro- 
duction to  any  industrial  audience.  He  has  been  active 
for  twenty  years  in  advanced  work  in  labor  manage- 
ment. For  ten  years  the  "Gantt  bonus  system"  has 
been  one  of  the  very  few  notably  successful  wage  meth- 
ods in  extended  use. 

CONTEXTS  BY  CHAPTERS 

I.     The  Application  of  the  Scientific  Method  to  the 

Labor  Problem. 
II.     The  Utilization  of  Labor. 

III.  The  Compensation   of   Workmen. 

IV.  Day  Work. 
V.     Piece  Work. 

VI.     Task  Work  with  Bonus. 
VII.     Training    Workmen    in    Habits    of    Industry    aud 

Co-operation. 

VIII.     Fixing  Habits  of  Industry. 

IX.     Profits,  and  Their  Influence  on  the  Cost  of  Liv- 
ing. 

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PEOFIT  -  MAKING  MANAGEMENT  IN 
SHOP  AND   FACTORY 

BY  CHAKLES  U.  CARPENTER 

PROFIT-MAKING  MANAGEMENT   is   a   concise   ex- 
pression  of  the  methods  whch  Mr.   Carpenter  has 
developed  and  which  he  constantly  uses  in  his  own 
practice.     They  have  been  tried  and  perfected  under  the 
stress  of  daily  operation  in  the  course  of  his  experience 
as  supervisor,   manager,    head   of  the   labor  department, 
and    president    of    various    large    manufacturing    plants, 
notably   the    National    Cash   Register   Company   and   the 
Herring-Hall-Mar-vin  Safe  Company,  of  which  latter  con- 
cern he  is  now  chief  executive. 

The  study  of  works-management  methods  will  be  found 
to  be  marked  throughout  by  the  clear  sight,  the  fair 
mind,  the  direct  dealing,  and  the  strong  vitality  of  the 
author.  The  whole  treatment  is  vibrant  with  life,  the 
work  indeed  having  been  produced  amid  the  incessant 
and  insistent  claims  of  active  work  in  the  management 
of  the  great  manufacturing  company  of  which  he  is 
president  and  manager. 

CONTENTS  BY  CHAPTERS 

I.     Reorganization  of  a  Run-Down  Concern. 
II.     Practical   Working  of  the  Committee   System. 
III.     Reports ;  Their    Necessity   and   Their   Uses. 
IV.     Designing  and  Drafting  Department. 
V.     The  Tool  Room;  the  Heart  of  the  Shop. 
VI.     Minimizing    the    Time    of    Machine-Tool    Opera- 
tions. 
VII.     Possibilities    Attending    the    Use    of    High-Speed 

Steel 
VIII.     Determination   of   Standard  Time   for  Machining 

Operation. 

IX.     Standard  Tinies  for  Handling  the  Work. 
X.     Standard  Times  for  Assembling. 
XI.     Stimulating  Production  by  the  Wage   System. 
XII.     Stock   and   Cost   Systems    as  a   Factor    in   Profit 

Making. 

XIII.     Upbuilding  of  a   Selling  Organization. 
XIV.     Effective   Organization  in   the  Executive  Depart- 
ment. 

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THE    PLANNING   AND    BUILDING    OF 
INDUSTRIAL  PLANTS 

BY  CHARLES  DAY 

A  SYNOPSIS  of  the  whole  problem  and  the  practical 
methods  of  solving  it,  by  one  of  the  greatest 
American  specialists  in  the  design,  layout,  and 
erection  of  efficient  manufacturing  plants. 

Mr.  Day  has  been  engaged  as  consulting  engineer  and 
adviser  in  the  construction  of  some  of  the  most  success- 
ful shops  and  factories  in  the  United  States.  His  book 
is  a  formulation  of  the  exact  processes  he  follows  in 
the  office  and  field  work  connected  with  such  an  under- 
taking. 

The  work  is  laid  out  by  a  logical  scheme  in  which 
every  step  is  in  its  proper  place  and  proportion.  The 
successive  steps  are  then  discussed  in  detail.  Novel  and 
most  interesting  diagrams  are  employed  to  illustrate 
the  methods,  and  many  recently  built  plants  are  showrn 
in  plan  and  elevation. 

The  scope  of  the  book  is  suggested  by  the  chapter 
headings  below. 

CONTENTS  BY  CHAPTERS 

I.     General  Classification  of  the  Work 
II.     Determining  Specific  Requirements  of  a  Plant. 

III,  Selecting  the  Site  and  Defining  the  Buildings  and 

Equipment. 

IV.  Derail  Plans  and  Specifications. 

V.     Construction    Work    and    Installation    of    Equip- 
ment. 

VI.     Occupation   and    Commencement   of   Operation. 
VII.     Routing ;   A  Prime  Factor  in  Plant  Layout. 
VIII.     Metal-Working    Plants    and    Their    Machine-Tool 

Equipment. 
IX.     An    Analytical    Comparison    of    Various    Actual 

Plants. 

X.     Power  Generation  and  Utilization. 
XI.     Functions  of  the  Engineering  Organization. 
XII.     Financing  and  Compensation. 

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PBOPER  DISTBIBUTION  OF  EXPENSE 

BUEDEN 

BY  A.  HAMILTON  CHURCH 

THIS  book  at  once  took  rank  as  a  standard  refer- 
ence work  on  one  of  the  most  difficult  questions 
of  cost-finding. 

The  accurate  distribution  of  general  expense  is  ad- 
mittedly one  of  the  most  perplexing,  but  yet  one  of  the 
most  important,  problems  with  which  the  manufacturer 
must  deal.  The  simple  but  thorough  analysis  conducted 
in  this  volume,  and  the  clear,  common-sense  demonstra- 
tion presented,  will  furnish  a  reliable  guide  to  the  solu- 
tion of  highly  complex  conditions  in  factory  accounting. 

Much  of  the  published  literature  in  this  field  has  been 
purely  descriptive,  and  has  gone  little  farther  than  to 
present  specialized  adaptations  employed  in  certain  in- 
dividual shops,  and  perhaps  not  well  suited  to  any  but 
the  one  establishment  for  which  each  was  designed.  Mr. 
Church's  material  is  of  far  greater  value.  He  is  not 
concerned  with  the  size,  ruling,  or  printing  of  forms 
and  cards— matters  which  should  be  designed  by  the 
accountant  to  fulfill  his  special  purpose.  He  goes  to 
the  root  ideas  of  cost-finding,  and  lays  down  broad  prin- 
ciples by  which  safe  and  reliable  figures  may  be  obtained 
for  machine,  piece,  and  job  costs.  These  principles  will 
properly  distribute  all  expenses  of  manufacture,  mar- 
keting, and  management,  so  that  the  truth  may  be  known 
as  to  the  profit  or  loss  of  any  line  of  product,  and 
changes  in  manufacturing  cost  from  time  to  time  may  be 
instantly  detected  and  the  cause  discovered. 

CONTENTS  BY  CHAPTERS 

I.  Interlocking    General    Charges   with   Piece   Costs. 

II.  Distributing  Expense  to  Individual   Jobs. 

III.  The  Scientific  Machine  Rate  and  the  Supplemen- 
tary Rate. 

JV.  Classification   and  Dissection  of  Shop  Charges. 

V.  Mass  Production  and  the   New   Machine  Rate. 

VI.  Apportionment   of   OSice  and   Selling  Expense. 

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THE   COMPLETE   COST-KEEPER 

4 

SHOP     COST-KEEPING.       FACTORY     ACCOUNTING 

BY  HORACE  L.  ARNOLD 

THIS  book  is  designed  to  give  such  an  exhibition  of 
widely-differing   systems    of  cost-keeping  now    in 
satisfactory  use  as  will  afford  any  manager,  al- 
though not  himself  an  accountant,  the  knowledge  need- 
ful to  an  intelligent  comparison  between  his  own  meth- 
ods and  cost-keeping  methods  in  general. 

Every  step  in  the  use  of  the  several  systems  is  mi- 
nutely detailed,  and  when  the  factory  production  is 
separated  from  the  purely  commercial  operation  of  dis- 
posing of  the  factory  product,  the  commercial  books 
are  also  described,  and  in  all  cases  the  number  of  men 
at  work,  and  the  number  and  class  of  bookkeepers, 
clerks,  messengers,  time-takers,  and  so  on,  employed  in 
cost  accounting  is  given,  so  that  any  manager  can  tell 
about  what  he  may  expect  the  use  of  a  similar  system 
to  cost  in  his  own  establishment. 

CONTENTS   BY    CHAPTERS 

I.  The  Necessity  for  the  Factory. 

II.  Manufacturers   and    Commerce. 

III.  A  Collective  Production  Order  System. 

IV.  A  Simple  System  for  Duplicate  Work. 

V.  A  General  System  for  Medium-Sized  Works. 

VI.  A  Complete  System  for  a  General  Iron  Works. 

VII.  An   Elaborate    System    for    a    Highly    Organized 

Establishment. 

VIII.  A  Special  Card  System  for  an  Electrical  Works. 

IX.  The  Card  System  of  Accounting. 

X.  General  Expense  Accounts. 

XI.  Mechanical  Aids  to  Accounting. 

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THE   FACTOEY   MANAGER 

THE  LATEST  AMERICAN  FACTORY  PRACTICE 
BY  HORACE  L.   ARNOLD 

THE  one  aim  of  "The  Factory  Manager"  is  to  ex- 
plain the  methods  of  highly  successful  factory 
and  shop  managers.  It  tells  how  they  eliminate 
dead  expense ;  unnecessary  fixed  charges ;  friction  and 
delays  in  handling  work ;  useless  help,  methods  and  rec- 
ords ;  unnecessary  time  and  material ;  interruptions, 
"waits"  and  guesswork ;  too  many  handlings  of  work, 
etc.,  and  how  they  arrive  at  the  exact  cost  of  all  work 
done. 

There  is  not  a  theory  in  the  whole  book.  Every  chap- 
ter is  a  working  plan  available  for  immediate  use. 
Every  method,  every  card,  every  blank  form  and  rec- 
ord book,  is  in  successful  use ;  every  one  is  the  result 
of  years  of  testing,  revision  and  improvement.  All 
cards,  tickets,  order-blanks,  page  or  sheet  headings,  etc., 
have  the  size  marked,  together  with  the  color  and  kind 
of  paper  on  which  they  are  printed.  Anyone  can,  there- 
fore, reproduce  any  form  shown  and  readily  apply  it 
to  his  own  business. 

The  purpose  and  exact  manner  of  using  every 
method  and  form  are  plainly  and  completely  explained, 
so  that  everyone  can  easily  understand  its  purpose  and 
determine  its  value  if  applied  in  his  own  shop. 

CONTENTS   BY   CHAPTERS 
I.     Factory      Routine,      Organization      and      Cost 

Finding. 
II.     Advances    in   Factory   Accounting. 

III.  Cost     Finding     System    of    the    Link-Belt    En- 

gineering Co. 

IV.  The  Forms  of  the  Link-Belt  Engineering  Co. 
V.     Cost  Finding   System   of  the   Bigelow   Co. 

VI.  The   C.    B.    Cottrell    &   Sons   Co. 

VII.  The   Potter  &    Johnston   Machine   Co. 

VIII.  The  Wells  Brothers  Co. 

IX.  The   C.    W.    Hunt   Co. 

432   pages,    Octavo,   Illustrated,   Cloth   Binding.     $5.00 

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THE    ENGINEERING    MAGAZINE 

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PATENTS  AS  A  FACTOK  IN  MANU- 
FACTURING 

BY  EDWIN  J.  PRINDLE 

TITE  purpose  of  this  volume  is  not  in  any  sense 
to  make  the  inventor  or  the  manufacturer  his 
own  patent  lawyer.  It  is  rather  to  convey  an 
idea  of  the  nature  of  a  patent,  the  protection  it  may 
afford,  the  advantages  it  may  possess  for  meeting  cer- 
tain commercial  conditions,  the  safety  which  may  be 
secured  in  relations  between  employers  and  employees, 
and  the  general  rules  by  which  the  courts  will  pro- 
ceed in  upholding  the  patent  and  in  thwarting  attempt- 
ed infringements — to  show  the  manufacturer,  in  a  gen- 
eral way,  what  may  be  accomplished  by  patents,  but 
not  to  lead  him  to  attempt  such  accomplishment  with- 
out legal  advice. 

CONTENTS  BY  CHAPTERS 

I.  Influence  of  Patents  in  Controlling  a  Market. 

II.  Subject,  Nature,  and  Claim  of  a  Patent. 

III.  What  Protection  a  Patent  Affords. 

IV.  Of  Infringements. 

V.  Patenting  a  New   Product. 

VI.  Patent   Relations   of   Employer   and   Employee. 

VII.  Contests  Between  Rival  Claimants  to  an   Inven- 
tion. 

i2mo,  Cloth.     $2.00  Prepaid 

THE    ENGINEERING    MAGAZINE 

140-142  Nassau  Street,  New  York,  U.  S.  A. 


THE  ENGINEEBING  INDEX 

1884-1909 


A  VERY  important  improvement,  every  new  inven- 
tion, novel  process  and  industrial  development 
may  be  traced  by  THE  ENGINEERING  INDEX.  Pa- 
pers on  tens  of  thousands  of  subjects,  both  of  theory 
and  practice,  are  recorded  in  it.  Each  index  note  is  de- 
scriptive in  the  literal  sense  of  that  term.  Thus,  in  ad- 
dition to  the  full  title  of  the  article,  the  name  of  the 
author,  the  title  and  address  of  the  journal  and  the  ex- 
act date  of  publication,  there  is  given  in  each  case  an 
expert  resume  of  the  ground  covered  by  the  article  or 
paper  described. 

THE  ENGINEERING  INDEX  is,  therefore,  both  an  Index 
and  a  Digest  of  engineering  literature  and  development 
in  all  parts  of  the  world  for  the  past  year.  And  this 
record  of  current  practice  in  engineering  is  exactly  the 
information  you  most  often  need — and  which  is  the  most 
difficult  to  obtain,  because  it  has  not  reached  the  stage 
of  insertion  in  technical  books. 

The  time-saving  utility  of  this  Index  consists  in  the 
fact  that  it  points  directly  to  each  and  every  original 
publication  that  the  searcher  may  desire  to  consult. 

VOLUME  I.,   1884  to  1891  inclusive,  475  pages. 

Out  of  Print. 
VOLUME  II.,  1892  to  1895  inclusive,  474  pages. 

Out  of  Print. 

VOLUME  III.,  1896  to  1900  inclusive,  1,030  pages $7.50 

VOLUME  IV.,  1901  to  1905  inclusive,  1.234  pages $7.50 

THE  ENGINEERING  INDEX  for  190G,  412  pages— $2.00 

THE  ENGINEERING  INDEX  for  1907,  452  pages $2.00 

THE  ENGINEERING  INDEX  for  1908,  454  pages $2.00 

THE  ENGINEERING  INDEX  for  1909,  488  pages $2.00 

THE    ENGINEEBING    MAGAZINE 

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S77 


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LD  21-100m-7,'39(402s) 


A 


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YB   18357 


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258787 


